HMRC figures reveal an increase in first-time buyer relief claims

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.

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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.’

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First-time homebuyers ‘saved £426 million’ as result of changes to stamp duty

Data published by HMRC has revealed that first-time homebuyers have collectively ‘saved £426 million’ as a result of changes to Stamp Duty Land Tax (SDLT).

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In the 2017 Autumn Budget, Chancellor Philip Hammond announced a new exemption from SDLT for most first-time homebuyers. From 22 November 2017, first-time buyers in England and Northern Ireland paying £300,000 or less for a residential property pay no SDLT.

First-time homebuyers paying between £300,000 and £500,000 pay SDLT at 5% on the amount of the purchase price in excess of £300,000. The relief only applies to purchases in England and Northern Ireland: SDLT is devolved in Wales and Scotland.

In the 2018 Autumn Budget, the Chancellor announced an extension to first-time buyers’ relief so that all qualifying shared ownership property purchasers can benefit, whether or not the purchaser elects to pay SDLT on the market value of the property.

This extension applies to relevant transactions with an effective date on or after 29 October 2018. It has also been backdated to 22 November 2017 so that those eligible who have not previously claimed first-time buyers’ relief are able to amend their return to claim a refund.

According to HMRC, more than 180,500 first-time homebuyers have so far benefitted from the changes to SDLT.

Mel Stride, Financial Secretary to the Treasury, said: ‘These statistics show that the government was right to offer a helping hand to first-time buyers. Without this investment, more than 180,500 new homeowners may have struggled to get onto the property ladder.’

Government publishes Finance Bill 2018-19 draft legislation

The government has published draft legislation for Finance Bill 2018-19.

The draft legislation is open for consultation, and ‘continues the government’s commitment to a competitive and fair tax system’.

It includes plans that could potentially affect a range of taxes, from Stamp Duty Land Tax (SDLT) to income tax.

The draft legislation also outlines the government’s approach to the Making Tax Digital (MTD) penalty system, with HMRC outlining its intention to utilise a two-tier penalty model for businesses and individuals who fail to pay their tax on time.

The July publication of the Finance Bill 2018-19 draft legislation forms part of the government’s new fiscal timetable. It hopes that the earlier publication of the legislation will ‘allow more time for scrutiny of tax measures, giving greater certainty and stability to taxpayers’.

Commenting on the draft legislation, Mel Stride, Financial Secretary to the Treasury, said: ‘Britain is one of the best places in the world to do business, and we’re determined to see that continue.

‘This legislation illustrates our commitment to creating an environment in which innovation and enterprise can thrive, while ensuring that everyone plays by the same rules.’

The consultation on the draft legislation will run until 31 August 2018.

Abolition of stamp duty for first-time homebuyers ‘benefits 69,000 households’

Abolition of stamp duty for first-time homebuyers ‘benefits 69,000 households’

The abolition of Stamp Duty Land Tax (SDLT) for first-time homebuyers of properties worth under £300,000 has ‘benefitted 69,000 households’, government data has suggested.

During the 2017 Autumn Budget on 22 November 2017, Chancellor Philip Hammond announced the abolition of SDLT, with immediate effect. From this time, most first-time buyers paying £300,000 or less for a residential property are no longer required to pay SDLT.

Official figures for the period to 31 March 2018 show 69,000 first-time homebuyers have ‘benefitted from the SDLT abolition’, saving an average of £2,300 each. The government stated that this is in line with its aim of ‘helping over one million people to get onto the housing ladder’ over the next five years.

Other initiatives introduced to help individuals to get onto the housing ladder have also seen a significant uptake, with more than 387,000 people using the government’s Help to Buy scheme, and over 1.1 million Help to Buy ISA accounts having been opened.

Commenting on the data, Mel Stride, Financial Secretary to the Treasury, said: ‘I’m proud that the cut to stamp duty for first-time buyers is helping to realise the dream of home ownership for a new generation, alongside building more homes in the right areas, and generous schemes such as the Lifetime ISA and Help to Buy.’

However, estate agent regulatory body NAEA Propertymark warned that the cost of purchasing a home for first-time buyers is ‘still very high’, with many individuals finding it ‘difficult to save for a deposit’.