Figures recently published by HMRC have revealed a 3% increase in the number of first-time buyer relief (FTBR) claims from the previous quarter, with 78% of transactions paying no Stamp Duty Land Tax (SDLT) at all.
FTBR eliminates stamp duty for first-time buyers paying £300,000 or less for a residential property. Since the introduction of FTBR in the 2017 Autumn Budget, there have been a total of 241,300 FTBR claims, providing an estimated total relief amount of £570 million.
First-time buyers paying between £300,000 and £500,000 pay SDLT at 5% on the amount of the purchase price in excess of £300,000. Those purchasing property for more than £500,000 are not entitled to any relief and pay SDLT at the normal rates.
The Association of Accounting Technicians (AAT) recently suggested that FTBR will cost UK taxpayers £670 million by 2021/2022.
It has called for SDLT liability to be transferred from the buyer to the seller. The AAT argues that this would help people to move up the property ladder, and would assist those in the ‘most populated and expensive parts of the country’, such as London and the South East, where house prices are significantly high.
Phil Hall, Head of Public Affairs and Public Policy at the AAT, said: ‘Switching stamp duty liability from the buyer to the seller isn’t a silver bullet for our myriad housing problems, but it would make the system fairer because those moving up the ladder would be paying duty on the lower-priced house that they are selling, not the higher-price one they are buying.’