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    Proportion of First Time Buyers paying Stamp Duty could more than double under Labour

    By The reallymoving Team Updated 27th Jun, 2024

    The proportion of First Time Buyers who face paying Stamp Duty could more than double if Labour win the General Election.

    The proportion of First Time Buyers who face paying Stamp Duty could more than double if Labour win the General Election, with 36% of First Time Buyers in England and Northern Ireland exceeding the Stamp Duty threshold under Labour, versus 15% under the Conservatives.

    The property price threshold at which Stamp Duty kicks in for First Time Buyers was temporarily raised in Liz Truss’s 2022 mini-Budget from £300,000 to £425,000. In their manifesto, the Tories have pledged to make the higher rate permanent whilst Labour has not, indicating it would revert to the previous £300,000 threshold from April 2025.

    According to data from reallymoving, the comparison site for home movers, the average First Time Buyer purchase price in England is currently £283,000, meaning no Stamp Duty is payable. However, First Time Buyers in the South East pay £318,000 on average, rising to £451,000 in London, meaning thousands more buyers could have to pay the transaction tax or face higher bills under Labour.

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    Most First Time Buyers in the North currently avoid Stamp Duty

    Thanks to lower property prices, very few First Time Buyers in the North of England and Midlands currently pay any Stamp Duty on their purchase. In the North East and Northern Ireland, just 1% exceed the current £425,000 threshold, whilst in the East Midlands and Yorkshire & the Humber it’s 2%, and 3% in the North West and West Midlands.

    Under Labour, if the lower £300,000 threshold is reinstated next April, 5% of First Time Buyers in the North East and Northern Ireland would have to pay the tax, 13% in the East Midlands, 12% in the North West and 14% in the West Midlands.

    In London the numbers are starker, with 80% of First Time Buyers liable to pay Stamp Duty if Labour form the next government, compared to 49% currently. Based on an average FTB purchase price of £451,088 in the capital, the typical Stamp Duty bill could rise from £1,304 currently to £7,554. In the South East, the proportion paying the tax would rise from 17% to almost half (48%).

    Reallymoving founder and CEO, Rob Houghton, said: “The fact that so far Labour haven’t matched the Conservatives’ policy to make the current higher Stamp Duty thresholds more permanent, will be worrying many First Time Buyers hoping to get on the ladder in the next couple of years. If Labour win, some may well attempt to bring their plans forward if finances will allow, to try and exchange contracts before the end of March next year. In London especially, the potential savings - at over £6,000 on average - are considerable.

    “Our research shows it already takes the average First Time Buyer nearly 6.5 years to raise the funds needed to buy a home, rising to 8.5 years in London, and it will take even longer if Stamp Duty thresholds are lowered once again.

    “Whichever party wins the election, immediate and meaningful help for First Time Buyers must be one of their top priorities.”


    For press information please contact: Sarah Lawrence  [email protected] 07984 422 461
     

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