After chancellor George Osborne yesterday pledged to continue taking ‘bold action’ on home ownership, The Law Society Gazette asked the question: could conveyancers be in for more stamp duty shocks when the government plans to confirm its final policy to increase stamp duty land tax on the purchase of additional properties at the Budget on 16 March?
Stamp Duty Savings for Homebuyers
On 29th February, the Treasury announced that more than 780,000 homebuyers have saved an estimated £657million on stamp duty since the government reformed the residential stamp duty system.
In December 2014, the system was changed from a ‘slab’ to a slice’ structure, which figures show has seen 98% of homebuyers save money in the last year. In the North West, new analysis released by the HMRC shows homebuyers saving an estimated at £700 for the average house.
Stamp Duty increases on 2nd properties
In Autumn 2015, the government went on to announce further stamp duty changes with a 3% surcharge (on each stamp duty band) on the purchase of additional residential properties, effective from April 2016 (read our blog ‘Higher stamp duty charges from April 1st – are you in the know?’ for more details).
This increase in stamp duty represents one part of Osborne’s ‘five-point plan’ to refocus support for housing towards low-cost home ownership for first-time buyers, which also includes
- Doubling the housing budget to over £2bn per year – creating over 400,000 affordable new homes by the end of the decade; 135,000 of which will be new affordable shared ownership homes to be built for buyers earning up to £80,000 outside London and £90,000 in London.
- Boosting the Help-to-Buy interest-free loan scheme will be boosted for homebuyers in London.
- Releasing Public-sector land with capacity for 160,000 homes and re-designating unused commercial land for Starter Homes.
More Stamp Duty Changes?
With chancellor George Osborne again quoted yesterday as saying ‘I am determined that this government will continue to take bold action to support a home-owning democracy’, we’ll all have to sit tight and see what 16 March brings.
If you have any questions about the new stamp duty charges on additional residential properties and/or the April 2016 deadline, or if you are looking to purchase a 2nd property and would like some advice, please contact Rachel Barrow on 01606 48777.