- New analysis shows first time purchases increased by 25,000
in 2018 due to First Time Buyers’ Relief
- Relief set to remain more generous until March 2025,
following eligibility changes to support homebuyers and the
property market in difficult economic circumstances
- Success of the relief is a welcome boost for the property
sector and supports economic growth
A tax relief introduced to help people get onto the property
ladder has resulted in 25,000 extra sales to first-time buyers,
analysis published today [31 May 2023] has
revealed.
First Time Buyers’ Relief (FTBR) increases the threshold at which
first time buyers pay Stamp Duty Land Tax (SDLT) and was
introduced in November 2017.
An evaluation report from HMRC reveals today that in its first
year the tax relief boosted first-time purchases by 11% for
properties worth between £125,001 and £300,000, and 18% for
houses worth between £300,001 and £500,000 – equating to an extra
25,000 homes bought by first time buyers in one year alone.
, Financial Secretary to
the Treasury, said:
“We are doing all we can to make the dream of home ownership
a reality.
“First Time Buyers Relief is making a real difference and
it’s just one of the ways we are helping people get a foot on the
property ladder.”
Last year the government increased the thresholds for the tax
relief to support the housing market in response to the
challenges the property market is facing in a difficult economic
period. Currently properties valued below £425,000 do not pay any
Stamp Duty Land Tax (SDLT) whilst properties worth between
£425,001 and £625,000 pay 5% SDLT.
These increases are in place until 31 March 2025, after which
they are planned to revert to their original thresholds of
£300,000 and £500,000, meaning that nearly 70 per cent of those
claiming First Time Buyers Relief, continue to pay no SDLT
whatsoever.
First Time Buyers Relief is one of many measures which have been
introduced by the government to help people get on the property
ladder.
This includes the First Homes scheme, which offers properties to
first-time buyers at 30-50% off the market rate. Shared Ownership
meanwhile gives first time buyers the option to buy a share of
their home (a minimum of 10%) and pay rent on the remaining
share.
The Mortgage Guarantee Scheme has also helped more than 35,000
households get on the property ladder since 2021. It sees the
government offer lenders the financial guarantees they need to
provide mortgages that cover 95% of the loan, subject to
affordability checks, on a house worth up to £600,000.
The government has also introduced the Lifetime ISA, which allow
those aged 18-40 to save or invest up to £4,000 per year,
receiving a 25% government bonus on their savings.
Since 2010 more than 837,000 households have been helped to
purchase a home through government-backed spending schemes in
addition to all those who have benefitted from the SDLT reliefs.
Notes to
Editors
