The mortgage industry has reacted with disappointment at the Government’s failure to make any changes to stamp duty tax in order to help first time buyers in its pre-budget report today.
Stroud and Swindon Building Society sales and marketing director Paul Chafer says: “We expected great things from a potential review of housing taxes, yet once again there has been a missed opportunity to support the UK property market by reconsidering the stamp duty thresholds. The current SDLT nil rate banding at £125,000 is outdated and should now be more in line with £175,000, as was expected to be announced today.
“First time buyers already have major difficulties in funding their first house purchase and with the majority of properties now in excess of £125,000, an additional SDLT charge only creates further complications for this particularly important section of the economy. The expected increase in the 3 per cent band from £250,000 to £350,000 was also overlooked, with little respite for those hoping to move up the property ladder – a state of play that could lead to stagnation of the market.
Grant Thornton head of property and construction Clare Hartnell adds: “Stamp duty land tax is the best weapon the Government has at its disposal in helping people onto the property ladder and it is amazing that further help to first time buyers has not been offered in the Chancellor’s latest pre-budget report.”
“The lack of an announcement on stamp duty land tax is particularly surprising given the Conservative’s proposal to exempt anyone who buys their first home for under £250,000 from SDLT. One would have thought that the Chancellor would rise to the challenge and offer a carrot to potential property investors, however, he may feel it too early to be fiddling with stamp duty when the housing market is cooling off.”
Hartnell says that the Treasury seems more interested in clamping down on tax avoidance rather than helping first time buyers: “The Government has signalled it will be looking closely at the use of special purpose vehicles to reduce stamp duty land tax and how to extend the disclosure regime to high value residential property transactions. So rather than use the pre-budget report to offer some help to first time buyers, the Treasury is instead trying to recoup revenue it believes it is losing out on as a result of property transactions made through companies.”