Yorkshire Building Society has today called on the Government to consider reforming stamp duty land tax to make it paid by sellers not buyers, removing the tax burden entirely for more than 225,000 people getting on the housing ladder every year.
Changing property tax rules in this way would save first-time buyers in the UK excluding Scotland an average of £3,791, with Londoners saving the most at an average of £13,171.
Based on putting away £250 per month, this equates to the average first time buyer avoiding 15 months of saving, or 4 years and 4 months in London.
Yorkshire Building Society, one of the country’s biggest mortgage lenders, will outline the case for reforming stamp duty in a formal submission to the Government today on what should be included in the Chancellor’s Autumn Statement due in November.
A total of 225,200 first-time buyers paid stamp duty between June 2015 and June 2016, having purchased a property above the £125,000 minimum threshold, representing 75% of all first time buyers.
The reform would lead to an additional 16,000 additional property sales in the first year, including 6,000 first time buyers, based on a 2% increase in transactions.
New build properties for owner occupation could be exempted from the rules, ensuring the supply of homes is not prevented by the additional tax.
Andrew McPhillips, Chief Economist at Yorkshire Building Society, said:
“More than 200,000 first time buyers paid stamp duty last year and removing this tax burden from them would give the younger generation a major leg up the property ladder. This would be felt most of all in London where on average our members pay a staggering £13,171 in stamp duty for a first home.
“The benefits would not only be felt by those looking to get on the property ladder as anyone moving up it would be better off too.”
Helpful Resource Depending On Your Requirements