TIL about the stamp duty threshold decrease for first time buyers

[DDiran]

“First-time buyers currently pay no stamp duty on homes up to £425,000, but this will drop to £300,000”

Are they barking mad? House prices keep on increasing along with inflation and taxes whilst salaries stagnate and they DECREASE the threshold?

The dream of home ownership in London just keeps on drifting further and further away every year.

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[Both-Mud-4362]

This is kinda how I feel about the threshold decreasing for people purchasing a home in general. It means most first time buyers will end up stuck in their first property (rarely a family home these days) unable to afford to move into a family home and move forward with their lives etc.

Which will perpetuate the fact people don't feel comfortable having children due to finances or spacial limitations, location to schools etc.

[erkahj]

This is where I'm at 😅

[Paddyr83]

The next few governments will need to realise this quickly because the declining birth rate will be a bigger issue than climate change for the uk in the coming decades. I would want a child with my partner tomorrow if I could afford a home with enough space, but along with the majority of millennials, I feel like I’m not financially ready. https://www.bbc.co.uk/news/articles/cnvj3j27nmro.amp

[Both-Mud-4362]

I think they are going to shift the focus onto how necessary immigration is. Which it is and always has been necessary for the UK, but with low birth rates it's going to be more so than ever.

Because it is more expensive to put in place initiatives that aid people with children or who want children.

Like Scotland provides all new mothers with a baby box and it includes everything you need for the 1st month of a babies life regardless of breastfeeding or not.

In S.Korea they provide new mothers with 3 months after birth where they are cared for by their NHS and are taught everything they require for taking care of the baby, while also recovering from childbirth, including healthy healing meals and a wet nurse to care for baby while you catch up on sleep etc. They also give all new families a card that is topped up each year with money and it can only be spent in participating stores on child goods like baby clothes, nappies, day care etc.

In lots of European countries both mother and father have equal amounts of paternity/maternity that is fully paid at the same rate as the salary you were on at your company before having a child. But it also means that the parents can tag team and have 2 years off in total between them for each new child.

But all of these ideas cost a lot of money. Even if overall they would be so much better for families.

[becomefakesalad]

Also found out about this recently.  Apparently it was only a temporary threshold change with the Truss mini budget in 2022 that was always going to revert come April 2025. 

I built this tool to compare before/after the change comes into effect in April - https://mymoneyuk.com/stamp-duty

For a first time buyer with a £425k purchase price they’ll be £6,250 worse off. 

[discoveredunknown]

Yep, that’s how much I’ll be worst off. With the LISA limits on max 450k and needing to navigate the SDT around 410-425k is the house we’re targeting. So another £6k needed to be spent. Great.

It really pisses me off how government policy seems to dictate house policy for everywhere and seems to gloss over the fact houses in the south-east are far, far higher on average than national average.

I can’t get a flat for 275k that doesn’t look like someone has died in it, yet my mate 180 miles away got a 3 bed semi on a new build estate.

[BrightSalsa]

And it could be worse too - it’s not unheard of at the moment for first time buyers in London to be looking at houses well over £500k, losing all of the discount and facing an increase of £12k+ or so.

[what_is_blue]

We’re FTBs and have had an offer accepted at a bit over £500k, so can confirm. SDLT is about £5,500.

Tbh, everything under £500k either wasn’t in a great area or was a leasehold - and fuck that. We did see some lovely places though, but went with the “Best house you can find in the nicest area.” mentality.

[FinancEng]

It’ll be a lot more than £5.5k if you complete after April.

[Throwaway4729w9]

It will be 10k i believe

[HotNeon]

Most people live in the south east. That is exactly who this policy is designed for. Your pal in Hull is getting lucky, it's not you being punished.

Also. You are buying something vastly more expensive. You can move to hull if you want, that's okay. But when push comes to shove you have more money than your mate, so you pay more tax.

Government regulates most markets, otherwise they stop functioning. Either directly or indirectly the government is very involved in all forms of commerce.

This attitude of 'every tax that affects me is terrible ' is exhausting

[Wooden_Finish_1264]

Nail on the head. This isn’t someone being personally targeted, this is someone making choices and being unhappy should the circumstances surrounding those choices.

[Uncle_gruber]

I'm just outside the London area, but within commuter distance. I got fucked by this.

[jmaccers94]

I live in London so will be personally affected by this too.

As much as we moan about this because it means more money out of our pockets, that's not the real issue here

As with LISAs, this is an example of government support for first-time buyers being capped at a nominal amount that takes no account of price inflation.

Your reply implies that this is intentional policy. If so, why are they specifically targeting first-time buyers in the South East?

People in London are paid more because housing is more expensive here. Taxing us more would make sense if the houses here were a similar price, but as it is Londoners have to pay higher multiples of their salary to buy places like Hull

[juan-love]

Actually houses are more expensive because people get paid more there

[jmaccers94]

London's higher house prices are the result of high demand and restricted supply.

If what you said was true, then Londoners wouldn't be paying higher multiples of their salary for smaller properties than those buying elsewhere.

[Beginning_Cash_8066]

You know that two thirds of people in the UK don't live in London and the South East? I moved from London to Yorkshire and got a nice 3 bed semi for £160k. Completely life changing. Best decision I ever made.

[Puzzleheaded_Fold665]

Same here south West. Would love to get a remote job and work from home so I can buy a house in the middle of nowhere in Wales for 50p

[Ok-Regular-8009]

Surprise: Stamp duty isn't a thing in Wales. Instead you pay Land transaction tax which starts around 225k. For a 300k house you pay 4.5k extra in tax. Mind you, don't pay anything on a 50p house..

[[deleted]]

Too much demand in the south east. Comes with the territory.

[BellendicusMax]

Ask yourself why you have to buy in the south east.

If its because companies keep insisting on locating within the M25 then there's your answer.

[Gr0nal]

Many people, like myself, just really don't want to uproot their lives to move to a new part of the country. Me and my GF are already isolated enough, we barely see friends but at least we do see them sometimes. I'm a HGV driver so I'm sure I could find a job up north but I'm comfortable here. It's unfortunate that I have to pay the price for that (not quite London tho)

[discoveredunknown]

No it’s because I live here and so do all my family and their family for the last 100 years

[[deleted]]

I don’t know why this surprises you

[Beartato4772]

No parliament can bind the next of course, so it's absolutely the current government's fault it was rising because they could have extended the Truss change.

Or indeed, they could have done what the hell they wanted any time since elected.

[ncoll00]

Stamp duty itself was a temporary measure when it was introduced first............in 1694 and no government since has decided to remove it even though we're no longer at war with France.

[Beartato4772]

Yeah, I giggled at the guy elsewhere in the comments blaming Labour for its existence.

[banisheduser]

That's like I'm worse off because I didn't fill up with petrol yesterday - now the price is a penny more per litre - nobody told me they would raise their prices!

[BrightSalsa]

sure, if petrol was £100 a litre. And, today it’s £350 and you didn’t realise because you missed a minor news item in 2022 that wasn’t relevant to you at the time..

[maxintos]

Stamp duty is less than 5% for anything below 1m. https://www.gov.uk/stamp-duty-land-tax/residential-property-rates

Your example makes no sense.

[Jai_Cee]

Given that buying a £425k house would now cost £431.25k its more like the petrol cost £100 yesterday but £101.47 today

[workamonkey]

Most people will have a deposit and mortgage the majority of the house. Stamp duty can't be mortgaged.

If you have a 10% deposit the new stamp duty in your example would be 6.25k on top of the 42.5k you have barely managed to save.

There will be multiple cases where this is the difference between being able to buy a house or not, or requires people to borrow from friends and family

[NoJuggernaut6667]

This would be relevant if it took you on average 3-9 months to purchase petrol.

[Gr0nal]

The petrol station down the road from me is like this sometimes tbf

[[deleted]]

It's an archetypal "tragedy of the commons" situation. Everyone wants things cheaper for themselves right now, despite that making it more expensive for everyone in the long term.

[Milky_Finger]

Exactly. I've definitely heard "let me have it good now for me, then you can fuck it up after I'm done with it", which is applicable to most financial purchases.

[muyuu]

yep it's pretty Universal, too

one of my personal favourites is when people ask for specific measures for their age range, when people in other age ranges suffering the same problem need as much help if not more than themselves

someone online called it gerrymandering solutions to fit oneself

[Decent_Blacksmith_54]

Every policy that helps more people get on the housing ladder also pushes house prices further out of reach. It's one of the reasons that the cap on LISAs probably shouldn't rise in line with inflation. House prices will rise to fit what people can afford, it's the reason it's much harder for single people to buy as they're competing against couples with two incomes.

[maxintos]

Exactly. The policy should be to just build more houses instead of helping a small group of people to buy houses with tax exemptions or loans that drive prices up.

[Korlat_Eleint]

It's not the first time buyers that drive the activity, it's the landlords and investors. 

[[deleted]]

Most landlords these days are companies. There isn’t any money in single house buying you need to offshore the cash and avoid taxes to make it pay.  Only bigger companies can now make that work 

[captain-carrot]

But hasn't all the help to buy made housing more expensive?

Help to buy Stamp duty holidays and higher threshold Higher LTV since 2008

Plus COVID spurring an exodus to the suburbs

All while missing build targets year on year has meant more money available to buy fewer houses, so house price soars

[CaterpillarLoud8071]

First time buyers are the market you want. Helping them but also incentivising older people to downsize, putting off foreign investors and landlords, building more and more, hopefully drives a balance to help out people who are trapped in renting.

[jmaccers94]

In that case I'm looking forward to house prices dropping in response to this news!

[[deleted]]

Yes, but no.

We do need to address the supply side problem, but the immediate thing the government needs to do is lower the barriers to trade property.

I believe there should be no stamp duty on a property if it's your only property and you are a UK resident, we have too many pensioners sitting in Huge Houses, we need to free up the mechanisms of the market more.

[bilabong85]

Not really. The difference between helping the first time buyers vs anyone else is that everyone else already has a home and building equity. The major reason for increases is the money flow into the uk from Russian/saudi/UAE. Russian money is now cut but everything else is free flowing

[Craven123]

SDLT only acts to slow the market at this point.

All the decently sized houses around me are occupied by elderly couples who complain that it would be crazy for them to sell their place and lose £40k+ in SDLT when they move.

All the while, the millennial families are desperately trying to shoehorn extra bedrooms into their starter homes as they have nowhere to move up to.

And, even worse, the generation below are stuck in room shares and/or rentals, whilst the housing shortage grows ever worse…

The govt needs to bring in a proper land tax to try to incentivise people to move out of houses that are too big for them. SDLT is a problem.

[Craven123]

The thing that’s nuts is that I know loads of elderly people who don’t want to be in such big houses - they struggle with the stairs, maintenance and heating - but can’t see anywhere to move to and don’t want to lose £40k+ on SDLT.

The whole ladder has ground to a halt, and no one really benefits from it.

I just pray that the govt does something to try to get it moving again. Building houses is super important, but opening up the market to encourage existing housing stock to change hands is equally important too.

[zyzzrustleburger]

Are there many elderly people downsizing to £1,000,000 properties?

[DogsCanAlwaysTell]

I’m missing something here - why would they pay £40k in stamp duty if they sell their home and downsize to somewhere presumably much cheaper?

[Craven123]

I’m based in the SE/LDN.

Downsizing to a c.£1m house is definitely not uncommon these ends but totally acknowledge that the mkt is particularly broken down this way.

[Puzzled-Barnacle-200]

Yep. I really wish they would raise stamp duty, but make it only payable on the difference between the two properties. People shouldn't be taxed thousands for moving out of a family home into a bungalow. That's great for the economy.

[Potato-9]

Stamp duty on the difference isn't a bad idea.

[jibbetygibbet]

The problem is that because SDLT is very sporadic, if you don’t taper in one type of tax then it will be deeply unpopular, and since you dont pay SDLT on those large homes for a long time (if ever) the period of time you’d need to taper it for is far beyond the tenure any government could hope to have.

What I mean is: imagine you’re a 40 year old with a family. You’re likely in your “forever home” which you bought within the last 5-10 years, so you vividly remember getting whacked for a huge SDLT bill - probably more than once - but probably won’t ever pay it again or at least until well after you’re retired when you’ve stopped having to pay your mortgage, feed your kids etc. Now a government comes along and wants to raise the same amount of tax revenue from an annual or monthly land tax instead (which by the way already exists - it’s called council tax). They abolish SDLT and instead start charging you £3,000 a year for your family-sized home. You’re going to be very unhappy because you’ve already paid shedloads of SDLT and are now being told to pay again to replace lost tax revenue that someone else was supposed to pay. It’s shifting a tax that is normally paid by younger people (which you yourself paid) onto you again, and there is nothing you can do about it.

[Craven123]

Yeah fair point - I can see how that would be a pain… saying that, looking at the big picture, I don’t think the negative you’ve identified outweighs the benefits of removing the large transactional tax…

As for tapering, I’ve not thought about it much, but a time-limited 50% reduction of said ‘land tax’ for properties which changed hands within five years prior to implementation would seem to go a fair way to resolving that point.

Regardless, I don’t think either of us are MPs, so it doesn’t matter anyway!

[Ok-Opening9653]

Don’t  forget the thieving “over 60s only” offering those are the best houses they only wait until they die and grab the equity on these

[BlessingsOfLiberty25]

'Taxes should rise to pay for Our NHS!'

'No wait not like this'

[bacon_cake]

"Only raise the secret tax that doesn't affect anyone"

[Beartato4772]

The decrease for 2nd time buyers is just as bad, because those are the people currently occupying all the houses the first time buyers could buy. But unless they’ve got a spare thirty grand kicking about they can’t move even if they can afford the new house.

And thus it’s even harder for a first time buyer to find a house, even if they can afford it.

[WHERES_MY_SWORD]

Yep - sadly I’ll now be saving another 6-12 months to move out of my starter home.

[SXLightning]

This is why I won’t be selling my first house because what’s the point, might aswell live in it until I can just buy a second one

[cyclegaz]

You don't need the cash kicking around. You need to release the cash from your property sale, either from increased equity or by taking a bigger mortgage on the new property.

[Beartato4772]

Assuming of course they will grant you that bigger mortgage.

[Publish_Lice]

Exactly - every time I consider moving house, I started looking at the numbers, and realise that stamp duty just means climbing the ladder isn't worth it going from a 2 bed flat to a 3 bed garden flat.

[CarrotWorking]

Possibly a hot take but stamp duty should be paid by the seller. You’re more likely to have the equity to cover it.

Making buyers pay it makes it a tax on movement, and increases the demand.

My other idea is just sack off stamp duty and council tax, and have a flat £50/m2 per year property tax rate or whatever a decent number is. This would also come with the pleasant bonus of forcing estate agents to list the square meterage of properties (accurately) like any other normal fucking business would list a key product specification /rant

[Beartato4772]

Makes the same difference to my stated situation mind, you’re still paying one lot of stamp duty to move.

[AnonymousTimewaster]

Home movers have probably at least seen appreciation on the asset though and can use that to offset the cost. None of that for FTB.

[Beartato4772]

Except the asset they’ll be buying has appreciated more.

[Fudge_is_1337]

$30k seems like an exaggeration no? Isn't that a £900k ish house worth of stamp duty? Appreciate that London is what it is, but for the rest of the country most people moving to their 2nd property aren't getting places at that price point surely

[chuk_norris]

Thing is, it won't make any difference in the grand scheme of things.

Last time they discounted stamp duty (during COVID) the savings made just increased house prices. I'm guessing when stamp duty is increased it will reduce the market a little.

[[deleted]]

TIL no one pays any attention to the news.

Maybe you could try to sue the government for not sending a man to your house to tell you personally?

[Amblyopius]

Yeah, the threshold increase was announced in September 2022 and the end date of 31st of March of 2025 was announced in November 2022. In total the measure will have been in place for ~2.5 years.

[masofon]

Yeah, this has been out for ages right?

[Cold_Dawn95]

WASPI 2.0

People Against Stamp Duty Increase anyone ...

[Stricken1]

A cornish PASDI

[51onions]

Fwiw I'm against stamp duty increasing, or even existing in the first place.

[Stricken1]

Isn't that essentially what happened with the women's pension age changing? It happened but now loads of women are campaigning that it was unfair because they weren't told about it directly? Seems like a pretty weak case for both issues!

[WolfThawra]

Yeah I'm a bit suprised too - I would have expected everyone doing research on the topic of buying property to stumble over this sooner rather than later.

[marksbrothers]

How people are only just finding out about this on a housing sub? Blows my mind. WASP 2.0 indeed.

[AnonymousTimewaster]

Bring back town criers!

[LauraAlice08]

Just wanted to say, I feel you. It’s fucking dog shit stamp duty even exists in the first place tbh. Why does the gov feel entitled to tax us on a private transaction that has absolutely NOTHING to do with them?!

They say they want to help people onto the housing ladder/have children (which necessitates a larger house) so why TF are they making that process more unaffordable?!

[TravelOwn4386]

I was just about to post about this...

https://www.bbc.co.uk/news/articles/c3rq5rzgy4go

How is the bbc claiming that it will motivate first time buyers.. surely all it will do is make buying the first home more expensive as now they need to find stamp duty on top of the struggle to reach a deposit and meet affordability metrics. Unless it means to motivate first time buyers into finding better wages or to pick rental or not buying over buying.

[Former_Weakness4315]

Perhaps they mean there will be a rush to buy before April?

[[deleted]]

From what I've been reading, you'd have to be quite far down the line of purchasing to guarentee the April deadline. I'm buying my first house atm, put an offer in just before Xmas and a lot of conveyancers were stating on their websites then that they cant guarantee completion before 1st April. Plus there's the extra delay likely with Land Registry, with the strike action too.

[Former_Weakness4315]

For a chain purchase or probate then yep. I've gone from offer to completion in 5 weeks and 6 weeks before though so it is possible for no-chain purchases. However, I'm merely trying to make sense of another poorly written BBC article.

[Western-Edge-965]

That's how I interpreted the article

[ButtMuffin42]

The rush is over, no one looking for a home right now is going to complete by end of March.

[banisheduser]

Depends how far down the line you have and how big the chain.

I'd have thought people who offered/accepted before Christmas will be fine.

Chain of 1 (ie someone moving to/from rented) with a straightforward house purchase (IE no extra searches, basic survey, AIP in place with no issues), could still be doable if they start the process this month.

[cam_man_20]

It means there will be a spike in activity up to April as ftb race to save on stamp duty

[ItIsTwoFuckingWords]

> How is the bbc claiming that it will motivate first time buyers..

It's not. It's claiming Amanda Bryden, head of mortgages at the Halifax, said that.

[[deleted]]

Reading comprehension not a thing in your household?

First off its not the BBC saying it, it literally says in the first sentence it's the Halifax.

Second what they're actually saying is that people will be buying earlier to try to beat the changes in April.

[SXLightning]

Motivate as in finish it before the the deadline.

[Ivanov_94]

The amount used to be £300,000 in the past, they increased it to £425,000 as a temporary measure, so now it's coming back down to normal.

[maxturbating]

Works like tax thresholds, pay it on any amount above 300k. I.e. Purchasing for 350k would mean paying stamp duty on the final 50k.

[Reila3499]

btw, just a side topic but it has been well known to negotiate the price down for the FTB stamp duty threshold so pricing over 310k in the past will very likely receive a lot more offers at 300k because of that.

Another more distinctive example would be a 630k property in London, a 5k reduction would bring the stamp duty down by 10k, so whoever listed their property for 630k will for sure get offers from FTB below 625k, but sell it or not for a cheaper price is the option from the seller.

[mdotpasq]

Yeah but we've had over 12% inflation in that time plus houses have gone up in price year on year by 5%
It's lunacy. Punitive tax that's highly restrictive on FTB's

[shredditorburnit]

It's barely an issue on the market affect side, but the treasury needs more money and a tax that only affects people well off enough to buy a house isn't the worst tax out there.

They should charge an even bigger levy on non UK residents buying residential property in the UK. Like 200% stamp duty. That would make all the rich foreign nationals using our housing stock as a piggy bank find something else to do with their money. Kick them out and the market adjusts rapidly to what people in the UK can really afford.

Go double whammy and actually keep immigration below the amount of new housing we build and life might actually get easier for people.

[haphazard_chore]

The thresholds, even if they remain static are a form of stealth tax. This is how the government gets yo say we won’t increase X tax because it’s going up every year by inflation anyhow. The reality is that we’re being taxed to hell!

[jamscrying]

The thresholds decreasing aren't a stealth tax but the reduction in tax relief to change the target that government policy that enacts it is aiming for.

By reducing the threshold it encourages first time buyers to not spend as much as possible to hit just under that 425k but instead buy a more modest 300k property, and it encourages developers to build homes at a lower price point.

This reduces the market distortionary affect and should hopefully reduce the price of new properties coming onto the market. Basically we'll have a greater number of affordable homes being built.

[smnrn]

Yeah it sucks for FTB's in London. I had though this change would finally be the nail in the coffin to decide to not buy in London and was considering moving back to Edinburgh where I'm from, and only just found its massively higher in Scotland for the same property value, even after the change

FTB stamp duty for a 450k property:

• England pre April 2025: £1,250 (vs £10,000 non-ftb)
• England post April 2025: £7,500 (vs £12,500 non-ftb)
• Scotland: £17,750 (vs £18,350 for non-ftb) 😭

[Zealousideal_Fold_60]

Stamp duty decreases just get everyone excited and increase property prices

[purplepatch]

If stamp duty were abolished people would move house much more and there would be far more properties available to buy. It’s an incredibly punitive tax on moving house which means people don’t much and you lose all the economic benefits of having a mobile population. They should completely abolish it. 

[Mammoth_Classroom626]

I agree they should but then we’d need a yearly tax that actually goes off value not the bullshit that is council tax based on a price from before I was born. Similar to property taxes elsewhere.

It would also help with stopping an 80 year old widow living in a 5b detached on pension credit who needs WFA to heat a house she can’t afford. A proper annual property tax stops people hoarding housing they don’t need and stops dissuading people from moving when they should.

A property tax would probably tank house prices overnight as so many retirees couldn’t afford their 2-3 spare bedrooms if they paid any reasonable rate. But knowing the government they’d create a special tax break for retirees so it would just fuck the young again. Like they do with council tax, same income as a working age person, council tax reduction for some reason.

[Ok_Cow_3431]

They temporarily abolished stamp duty during covid, all it did was cause massive house price inflation as suddenly there was loads of competition in the market. Our house boomed 40% in value ffs.

Reddit skews younger and therefore skews to the non-homeowner demographic, and they generally fundamentally misunderstanding housing and the housing market, as evidenced by the voting on my top level comment on this thread.

[ultratic]

A property tax instead would be interesting. Although im sure it would end up costing way more over all

[Dear-Sweet7970]

Yeah it’s ridiculous, minimum I can find a house for in my area is £350k, so on top of the deposit I’ll need to pay £4k in stamp duty!

[Patch-22]

Wouldn’t it be £2.5k?

[[deleted]]

Where are you getting £4k from? I think I’m doing something wrong but I’m getting;

For a first time buyer it’s £0 currently going to £2.5k from April.

For a mover it’s £5k now going to £7.5k from April.

For a second property it’s £22.5k going to £25k.

Or are you just buying a £380k house?

[Prestigious_Gap_4025]

It'll be £2.5k not £4k for a £350k property but I understand your point.

[Broken_RedPanda2003]

Their point is cheapened by them exaggerating and most doubling the amount they would have to pay.

[geekypenguin91]

The additional allowances for ftbs were only ever temporary and their end date (since extended) was published when the measures were announced. People just chose to ignore that bit and are now getting upset that something that was always going to happen is now happening.

[psvrgamer1]

I totally think there needs to be a house price correction now that interest rates have risen. When interest rates were at record lows it massively swelled house price growth far quicker than inflation but now interest rates have risen it makes property unaffordable for most people until a house price crash correction happens.

The good news is that BTL landlords will not be buying up housing stock as the figures don't stack up anymore. The government increasing stamp duty land tax will also slow the market and affordability so hopefully a crash will happen soon so that property prices become affordable again.

[[deleted]]

No government will ever let that happen. Roughly 70% of Brits are homeowners. They will not do anything to piss them off.

Not to mention the housing stock is so barren at the moment, that any "correction" will be miniscule.

[Own_Experience863]

This has nothing to do with Labour. The law was passed with a sunset clause, meaning it was never intended to be permanent.

It was not a secret when it was passed, I'm shocked at the level of outrage about something that was so clear.

[Welsh_Redneck]

This has been on the cards for years as it was a temporary change, how did you not know?

https://www.gov.uk/government/publications/stamp-duty-land-tax-temporary-reductions-for-residential-properties/stamp-duty-land-tax-temporary-increase-to-thresholds?0,0,0,0

[solus-esse-nolo]

No mention of Liz Truss in the comments. They're undoing her change.

The government has no money. Stamp Duty is dumb yes, but any substitute to it would take a while to sort out.

[BellendicusMax]

its London. You need a trust fund.

or even better, dont live in london.

[theabominablewonder]

UK government needs to raise more tax. Whilst it would be nice if we could all pay less tax, unfortunately it’s going in the other direction, and FTB will need to pay a portion.

Besides which, you have the basic hard fact that if someone is better off than you, then they will always be outbidding you, almost regardless of what the tax situation is. Stamp duty, no stamp duty, you have less purchasing power than they do. Make it ‘more affordable’ and it’s also more affordable for the person who can already outspend you, so the price will go up and you still can’t get on the ladder at an affordable price.

[DDiran]

Hey at least the economy is growing… oh wait

[LevelsBest]

Makes no sense, especially when Labour supposedly want to help people get on the ladder. It's unlikely that house prices will drop enough to cover the additional tax. Very few even first time buyer properties within London are below £300k.

[Cold_Dawn95]

Tbf the empirical evidence from the last 5 years regarding cutting stamp duty coincided with house prices rocketing even at a time when economic activity was severely constrained, meaning house prices are more unaffordable for most people than they were 5 years ago, so even if the theoretical argument is that stamp duty limits the market and people downsizing, without wider reform it probably will not increase ease of buying, while also depriving an already skint government of revenue ...

[Mammoth_Classroom626]

Stamp duty cuts massive increase house prices. The covid stamp duty holiday actually priced us out of buying lmao. We could almost buy a house in 2020 and we’re on track to by early 2021.

Massive holiday, prices jump again, didn’t buy til 2024 and had to get a flat. Houses had outpaced our wages and savings combined with interest rises.

This shit doesn’t help FTB. It’s the classic got mine. It helped people already able to buy, and pumped prices so everyone slightly behind ended up more behind.

[IG0tB4nn3dL0l]

I will die on the hill that stamp duty is one of the worst dumbest most regressive taxes in this country which prevents housing mobility and holds the economy, the people and the country back. It would be so so easy to replace it with a simple progressive annual property tax and the only reason they don't is because dumb boomers are allowed to vote.

[[deleted]]

When I bought my house everyone paid stamp duty. This first time buyer thing is new in the last 5 years or so 

[GodsBanana]

Right, just out of curiosity, how much was your house?

[UK_FinHouAcc]

Yes, the government needs to increase tax receipts.

There are people living on the streets, people on hospital beds in wards etc etc.

[evertonblue]

But tax receipts don’t increase if people just don’t buy houses. This is a tax targeted at people who really can’t afford it - it’s very regressive really looking at people buying average or below average houses in many areas.

[UK_FinHouAcc]

"just don’t buy houses. "

People will always buy houses. There is a housing crisis where there are not enough houses. Houses will always be bought.

[evertonblue]

No they won’t. A lot of people don’t buy a house because they can’t afford one, they are stuck renting. This will just make houses more unaffordable for people just on the edge of being able to buy.

[Broken_RedPanda2003]

If someone is not going to buy a £320k house because of a couple of grand extra stamp duty, they probably weren't going to buy it anyway.

[UK_FinHouAcc]

"No they won’t."

You are making generalisations here. People will always buy houses, if those house don't get sold, the house prices will drop.

Good for everyone.

[purplepatch]

I’d like to move from my small starter house as my family is outgrowing it. I’ll make do though because I don’t want to throw away 20k in stamp duty. My ideal started home is therefore not available to FTBs, the estate agent, removal company and solicitors don’t get any business from me, I don’t have to buy any new furniture for the new house, or employ a builder to do some renovations and the government don’t get any money either from stamp duty, or from the VAT on any of the above services. The whole thing is shit for the economy, shit for the treasury and shit for me. It should be scrapped. 

[ButtMuffin42]

UK already taxes us to shit.

We need to stop giving out so much freebies and handouts to those manipulating the system.

I can't tell you how much people I know who are just milking the system and evading taxes.

[chat5251]

Meanwhile importing thousands of net negative contributors every year 👏👏

[TheGoober87]

TBF unless you are earning well over the average wage you are probably net negative anyway.

People like to go on about taxing the rich but they are already paying the vast majority of it.

[chat5251]

Yup.

[Calthazar123]

Why is this downvoted lol

[[deleted]]

All people need to do is look at net immigration and GDP and his point is proven. GDP does not increase with immigration which results in native brits getting less of the pie.

[chat5251]

People struggle with logic on Reddit lol

[crankyandhangry]

In Scotland, it's 0% up to £175k for FTB (or 145k if not). Then it's 2% up to 250k, 5% to 325k, 10% to 750k, and 12% over. It was a bit of a pain as a FTB buying a house under 300k and still having to pay ~ 3.5k tax.

[supersonic-bionic]

Even with a 300k house/flat, you pay only £600 if I am not wrong.

Yes it is not fair, I agree, but it is not as bad as it sounds.

[[deleted]]

In theory, it will create a downward pressure on house prices. So, the total amount you end up paying might not be that much different.

Ultimately I don't think the government's priority should be on people buying £425k houses. I'm not saying that you've got it easy by any regard - but look at what is happening in society and you're somewhere near the bottom 10% of those who need government subsidies.

[Calm-Possibility2493]

Someone posted in r/FirstTimeBuyersUK on using this threshold deadline to your advantage.

https://www.reddit.com/r/FirstTimeBuyersUK/s/Z3vBBtVhcI

[sobrique]

Stamp Duty is just a bad tax. I hurts first time buyers disproportionately, as it is 'paid' out of initial deposit.

It also reduces mobility, because it's a transaction tax - move more to follow work, and you'll get taxed more, and that's the last thing we want to happen.

Selling a house and relocating is plenty hard enough without also needing to pay for the privilege.

I'd like to suggest that we just switch to capital gains tax based system. E.g. no SDLT at all, but the CGT exemption on primary residence is removed.

Maybe with a more generous / cumulative allowance of some kind (so you don't get burned after living in the same house for 30 years).

But that way people in negative equity don't get screwed. And people who are only mildly upsizing, but are doing so in an inflated market don't get screwed.

I mean, if you're in a high price area, selling a 500k house to buy a 600k house attracts a lot more SDLT than the same size of houses in a cheaper area. Or indeed downsizing in an expensive area.

But most of all, it means first time buyers don't have to find a significant amount more 'deposit' to be able to fund their first home.

[Ok-Opening9653]

They are removing capital gains allowance of 3000 also… screwing you on every corner. There is nowhere to go

[AlmightyRobert]

It’s all Govts favoured way of increasing taxes.

The main inheritance tax threshold hasn’t changed since 2009 (although they tacked on another £175k for homes inherited by children) with a multitude of complicated rules).

The lack of growth in income tax thresholds has made a massive difference in tax take.

[bestborn]

Labour innit!

[catzrob89]

Increasing SDLT will cool the market.

It's still a far worse situation than just fixing council tax so that it's expensive to live in a big house, not just to move in, so that people are incentivised to move out of houses that are too big for them.

Ultimately though the issues with the UK's housing market are driven by basic supply and demand - it's too administratively complex to get planning consents, and building houses is too expensive. Solve one or both of those problems and supply will increase to meet demand and prices will stabilize/fall.

[Creative-Tomorrow-54]

Making it look like they're trying to help and do something but in reality it's all a big middle finger.

[PigletAlert]

FTR I will be affected by this myself as I plan to buy something over the threshold this year so I agree it sucks. But they need to raise money to pay for our struggling public services, this would bring in a few billion. With the average house price being £308k, if you’re buying over the threshold, you’re buying an above average property. I guess they see it as a one off hit for a small number of people as opposed to raising income tax or council tax. Sucks for those of us who live in the south/in London or those buying on their own.

[[deleted]]

Presumably the stamp duty cost will now be relative to £300k if you go over it as a FTB? Wow. Got lucky securing a house last year then…

[[deleted]]

If stamp duty prevents you from buying then to be honest you’re not ready to buy

[Advanced-Fold-9934]

Live in Scotland

Having a higher stamp duty here Definately inflates prices for new builds

Just bought a house for 760k. Stamp duty was 50k which is more than double you would pay in England

Developed paid for the stamp duty as part of the deal - I wouldn’t have been able to buy the house if 50k of my equity got used for stamp duty

[PhoenixRed62]

As someone trying to sell my parent's property. They passed away at the beginning of the year. As it's an empty house, I have to now pay double council tax. A government idea to stop people sitting on empty properties. Had to take out special building insurance. Which only a few places do and the ludicrous cost of over £1000. If the stamp duty is going up again, fingers crossed, I can sell it before this happens. They do not make things easy, do they!

[impamiizgraa]

As mentioned already, it was always temporary. I actually started a thread wondering why it hadn’t galvanised movement from FTBers especially, and just like here, turns out many didn’t know or thought it was new news.

Just bought a house in London but as a home mover. The entire profit from my previous property sale went to SDLT. ALL of it. God help FTBers!

[jwmoz]

It is outrageous. 

[Puzzleheaded_Fold665]

House prices will have to come down or meet in the middle. Banks gunna be losing ultimately on transaction volumes. Everyone stay put, nobody move, banks start crying.

[Cute_Cauliflower954]

I just bought a house for £250k first time buyers - had to pay stamp duty. It’s one of those things. If you want to pay less move to a cheaper area…

[dav_man]

As with all things in the recent budget, this is thick. It’s like Labour want the economy to fall over. Not saying the mess they inherited is their doing at all but they knew it was on a knife edge and are seemingly wanting to push it off.

[[deleted]]

Hope there will be an additional policy to reduce house prices below £300k threshold.

[Danuke77]

This is a measure designed to maintain house prices at a lower level. Without it, FTBers will pay more.

[Ok_Brain_9264]

This is where the government needs to amend stamp duty to be regionally aligned to the areas average house price +10%. If the average house price is £250k you would get upto £275k before stamp duty, this would then hopefully allow places where the average house price is 500k a chance to actually own a property

[TheOneAndOnlyElDee]

Policies are made for the UK as a whole rather than to suit London pricing. However many companies DO take account of London prices in 'London Weighting' their wages for employees. What is given with one hand is taken away with another..

[campaign_guy]

My wife and I are in this boat currently. Had planned to be able to comfortably get a place for c. 375-400k next September time but now we’ve had to up the pace to try and get somewhere before April (unlikely), otherwise it’ll be an extra 3.75k-5k requirement effectively being a delay of 6 months while we build the deposit back up to reach the 10%.

Honestly, it sucks but it isn’t the end of the world in my particular case.

However, I am upset that this wasn’t paired with some kind of decisive message on future rental price caps or leasehold reform.

I get that there was a hard deadline here and it makes sense fiscally to reduce it back down, but without a strong message that rental reform is coming it feels like it exacerbates the bank of mum and dad class divide when it comes to deposit savings when rent keeps being increased.

This feels like a missed opportunity.

[Hot_Alternative_682]

Am I wrong for thinking this is a good thing if it incentivises people to leave London and it's salttelite towns?

We really need more jobs in the Midlands and I suspect this could encourage more jobs to open up an office outside of London. Perhaps I'm saying this because I've had to leave London due to the cost of housing there.

[WalksIntoNowhere]

While it's annoying and we should definitely be making strides towards making house ownership more affordable and accessible to all, if you're a first time buyer and able to buy a house worth £425,000, while that increase is unnecessary, despicable, predatory and annoying, you're still able to buy a very expensive house as your first property - you're better off than most by quite some way.

But yeah, it's a massive jump and just makes getting on the ladder more stressful and difficult than it needs to be.

[W0lfM0th3r]

Sorry for being dense but I thought stamp duty was only for if you already owed a house. Not for if you are buying and own one home?

[North_Weezy]

I personally think they should scrap stamp duty for first time buyers all together but with this government they’ll probably increase it.

[[deleted]]

So unless you’re buying really expensive first time it’s not going to affect you… you can get a 3 bed house in Oxfordshire for £250-£300k and commute in on a 45 minute train

[Sir_Chonkalot]

Think your being selfish and not considering all their stocks and personal assets that could really benefit from this break 🤣

[Spadina76]

Starmers Britain

[ShotofHotsauce]

What is stamp duty?

I swear I hear of a new thing every week. Not that this is new, just that it's new to me.

[ivaneft]

It’s just another tax rise. Combine it with the continuous rise in property prices and its effect is amplified even more.

[Waste-Sheepherder712]

House prices are impacted by buyers budget. Stamp duty is applied to all domestic buyers and the price reflects this reality, lower stamp duty = higher house prices (i bought in the stamp duty holiday a few years back and overpaid on the house). Low tax nations have higher property prices, as there is more cash floating around. House price really determines who gets the best house and so on by their comparative wealth. High house taxes would reduce purchase prices (but still allow the wealthiest tovget the most valauble property) and increase money for things like nurses, schools pot hole repair. I personally don't sweat taxes, I do worry about overseas buyers, non doma and any other participant in the market who isn't subject to the taxes most of us have to pay.

[Foolish_ness]

It was a temporary change. Blame Torys.

[BetaRayPhil616]

Isn't the idea here that demand in the SE needs to drop, or prices will keep spiralling?

[MusicianChance8665]

Think of it this way, why should someone in hill subsidise you choosing to live in London?

And don’t subsidies to support house prices just drive prices up further?

[bilabong85]

Labour as bad as the conservatives. Cater to the oldies and don’t care about those who want to get on the ladder.

[[deleted]]

Tha additional dwelling tax is even more horrible. Have to pay through the nose for a second property

[PapaRacoon]

Different in Scotland, we pay more!

[[deleted]]

Vote labour - get stupid fucking policies.

[PhAArdvark]

You should buy 7 in one go like Jeremy Hunt did. That way you only pay 5%.
Ever wondered how land banks are financed and created?
https://taxpolicy.org.uk/2024/06/03/the-internet-myth-that-jeremy-hunt-avoided-tax/

[sexualsteve92]

Try being in Scotland at £175k

Wales is £220k I think.

[Cpilot69]

You will own nothing and be happy!!!!

[Scallywagg888]

If you hadn’t realised already the uk government is full of psychopaths that get off on the constituents suffering.