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Here’s the taxing reason why first time buyer demand remains strong

Nearly two thirds of UK homes for sale are exempt from Stamp Duty following changes introduced by Philip Hammond in his Autumn 2017 budget.

Sheila Manchester

first time buyers

Zoopla’s latest research has revealed why demand from first time buyers property has remained so strong over the past year after discovering that 59% of UK homes for sale were within the tax-free Stamp Duty threshold for those getting onto the property ladder.

Comparing listing prices to the tax thresholds across England, Scotland and Wales, Zoopla therefore uncovered where first-time buyers are least – and most – likely to pay tax.

 59% of UK property is, for them, free of stamp duty
  • 59% of all homes for sale across the UK fall under the Stamp Duty Land Tax (SDLT) threshold for first-time buyers
  • Scotland has the highest percentage of LBTT tax-exempt properties
  • First-time buyers in Bootle and Shildon are least likely to pay any SDLT
  • In London, Croydon has the highest percentage of SDLT exempt homes
Current thresholds for first-time buyers:
  • England: Stamp Duty Land Tax (SDLT) – £300,000 threshold
  • Scotland: Land and Buildings Transaction Tax (LBTT) – £175,000 threshold
  • Wales: Land Transaction Tax (LTT) – £180,000 threshold

First-time buyers in Scotland are most likely to benefit from a tax free purchase. 99.6% of properties are priced under the LBTT threshold. That figure is 58% in England and 56% in Wales.

Bootle in Merseyside and Shildon in County Durham top the list of places where first-time buyers are least likely to pay any Stamp Duty.

In London, Zoopla found that the best Stamp Duty exemption and partial relief was the London Borough of Croydon, where 26.8% of homes were for sale for under £300,000 across the 12 months. Unsurprisingly the London Borough of Kensington and Chelsea, had just 9.2% of homes offered first-time buyers any tax relief.

first time buyersLaura Howard (left), at Zoopla, said, “Our research revealed that first-time buyers are the largest buyer group of 2019 – indications are that many have been bolstered by the SDLT relief that applies to a typically-priced, entry level property.

“59% of homes for sale are exempt from stamp duty- or its country’s equivalent. This is certainly unlocking the prospect of homeownership for many first-time buyers, who might otherwise struggle to gather enough cash to cover all the upfront costs.’

Read more about first time buyers.

 

October 10, 2019

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