Scrap in Stamp Duty Land Tax for First Time Buyers

Scrap in Stamp Duty Land Tax for First Time Buyers

The Government have today announced in the Autumn Budget, plans to cut Stamp Duty Land Tax (SDLT) for First Time Buyers (FTB's) in the hope of easing the current housing crisis. Chancellor Philip Hammond declared the plans in an effort to help First Time Buyers (FTB's) struggling to get on the property ladder.

The change has been introduced as new data shows that SDLT alone blocks 45,000 house purchases each year. It has been welcomed by many as there are concerns that the property market is at risk of coming to a standstill, and with the increase to interest rates, this is seen as a beneficial change to the home buying process.

What is SDLT?

Stamp Duty Land Tax is a tax paid on the purchase of both residential and commercial properties, if over a certain value, in England, Wales and Northern Ireland.

You pay the tax when you:

The amount of SDLT you pay will vary depending on if the property is residential or commercial, however the changes in today's budget affect only residential transactions.

Why choose to change Stamp Duty?

This is not the first time the Government have introduced changes to Stamp Duty Land Tax (SDLT) as a way to rectify the issues facing the market.

The Government had introduced a similar measure to the one announced today in 2010, again as a way to boost the number of First Time Buyers (FTB's). On this occasion a temporary relief was brought in for purchases of residential property up to £250,000, and was only applicable for those purchasing their first home. The period applied for house purchases completed between 25th March 2010 and 24th March 2012.

Another measure brought in to try and discourage those purchasing multiple properties, and to encourage First Time Buyers (FTB's) to get a foot on the ladder, was the introduction of the higher rate of Stamp Duty Land Tax (SDLT). This was effective as of April 2016. The aim was that the significant increase in Stamp Duty may deter those purchasing additional properties, giving way for First Time Buyers (FTB's) to enter the market.

What is the amount of SDLT payable on residential properties currently?


Standard Rate:

Higher Rate:

Up to £125,000



£125,001 - £250,000



£250,001 - £925,000



£925,001 - £1.5m



Over £1.5m



What are the changes?

  • Stamp duty to be abolished immediately for first-time buyers purchasing properties worth up to £300,000
  • In London and other expensive areas, the first £300,000 of the cost of a £500,000 purchase by first-time buyers will be exempt from stamp duty

As per the HMRC's guidelines, in order to count as a first time buyer, you must not, either alone or with others, have previously acquired a major interest in a residential dwelling or an equivalent interest in land situated anywhere in the world. This includes previous acquisitions by inheritance or gift, or by a financial institution.

If the property is purchased jointly, all the purchasers must meet these conditions.

What will the changes mean for you as a First Time Buyer?

The Daily Telegraph has reported that Land Registry studies suggest that as house prices vary across the country, the average saving for First Time Buyers (FTB's) will be just less than £3,000.00. Those in London stand to save the most, with the average saving being £11,119. For those in East Anglia, where the average house price is £241,000, First Time Buyers (FTB's) stand to save an average of £2,324.00 (the third highest saving across England).


Average FTB House Price:

Current Stamp Duty Bill:




South East



East of England



South West



West Midlands



East Midlands



North West



Yorkshire and the Humber






North East



If you are buying for £300,000.00 and you qualify for the relief you will save £5,000.00

Will this measure help the housing crisis?

Whilst the temporary relief period that ran from March 2010- March 2012 shows the cut in Stamp Duty Land Tax (SDLT) can be successful in enticing First Time Buyers (FTB's), it is not the only factor affecting them today.

First Time Buyers (FTB's) still face the struggle of saving for the deposit needed as part of the purchase, mainly due to the ratio of property prices to incomes doubling over the last 30 years. As such, many receive a gift from parents or grandparents to aid towards the deposit and therefore allowing them to purchase their first home.

Many also now face the effect of the rise in interest rates, which are the highest they have been in five years. This will have a direct impact on mortgage rates, meaning monthly repayments are likely to be higher, and this is just another thing for potential home owners to consider when deciding whether to buy their first home.

The issue of Buy to Let investors, or those wishing to put their money into purchasing additional properties is not alleviated by the removal of Stamp Duty Land Tax (SDLT) for First Time Buyers (FTB's) so it is unlikely this will help even out the market.

It is hoped that this together with the other measures announced today will help the housing market and first time buyers.

Alongside the current changes impacting the country it remains to be seen if this will have the desired effect on the market, however any help for First Time Buyers (FTB's) in this economy is certainly welcomed!

Whether you're buying, selling, investing, or letting a property our Conveyancing experts are on hand to help guide you through the process. Contact us today on 01603 693500 or email us using 'Make an enquiry' form. Appointments available at our Norwich, North Walsham and Sheringham offices.