Stamp Duty Holiday for First Time Buyers

Looking back at last months budget there was some very good news for first time buyers as a stamp duty holiday was put in place for purchases below £250,000.

The government also declared a five per cent Stamp Duty levy targeting those buying million pound houses in order to fund the two year stamp duty holiday.

The Association for Mortgage Intermediaries (AMI) Robert Sinclair called the Stamp Duty move political opportunism. He could be right. First-time buyers still have to save up many more thousands of pounds for their deposit to have any chance of getting a mortgage and helping first-time buyers always has a nice electioneering ring to it.

However, first-time buyers won’t mind, a £2,500 hand out will be eagerly snatched up from any political party as its £2,500 less to save or borrow.

The Stamp Duty change gives buyers an increased incentive to negotiate hard to keep transactions below these levels as significant savings can be made. With the majority of property transactions in the UK falling below or around the £250,000 boundary this means that if you are purchasing around this price then it would be to your advantage to negotiate below the threshold for a £7,500 saving in tax.

It will also be interesting to see the impact on prices of properties around the £1million mark. With stamp duty rising to 5% for properties of this size, any transaction over this limit will come with a minimum of £10,000 in additional tax.

Taj Kang, Associate Director at Contractor Mortgages Made Easy commented “It is unfortunate that the two-year holiday hasn’t been extended to all property buyers as nine out of ten first-timers will avoid paying out up to £2,500. However this is a significant saving for first time buyers that should be welcomed with open arms”

If you want to take advantage of the stamp duty holiday, calculate how much you could borrow based on your daily rate by clicking here