The Chancellor’s last budget before the election has indicated that the Finance Bill will affect few areas of the property market.
The property headline grabber is that First Time Buyers will be relieved of paying stamp duty at levels up to £250,000.
This appears to only benefit First Time buyers. How does the Chancellor define a First Time Buyer ?
As the Stamp Duty Land Tax is based on the whole purchase price, no advantage has therefore been offered to the majority of the persons looking at moving or buying a property.
The majority of properties are not bought by first-time buyers; a significant number are people relocating because of work or other reasons, upsizing because of a growing family, downsizing due to retirement, divorce, bereavement, buying a second home for holiday purposes or for letting “investment” purposes. For all these property purchasers, this increase in Stamp Duty appears to be irrelevant.
We are not aware if the Disadvantaged Areas Allowance has been discontinued, as this was set at a level which increased the former basic threshold from £125,000 up to £150,000 for certain specified areas. If the purchaser is a first time buyer, this Allowance threshold would now be irrelevant.
Persons purchasing properties over £1,000,000 will have to pay a greater proportion in stamp duty, up to 5% from April next year. This will not affect anybody for a year and so the impact of this on the immediate market is likely to be limited.
More detailed analyses will be carried out over the next few days as we and other analysts look over the released details from the Treasury and examine whether this great headline for a Budget will make any difference at all to the property market. The Devil really is in the Detail.
2:00pm 24th March, 2010
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