Boris Johnson Plans To Stimulate Property Market By Cutting Stamp Duty
During a recent husting in Bournemouth on Thursday evening, the potential future PM, Boris Johnson, outlined his plans for an emergency budget which would significantly cut stamp duty and reignite a stumbling property market.
Boris Johnson told the group of Tory voters that the budget would overhaul the current stamp duty land tax (SDLT) thresholds by scrapping SDLT on properties worth less than £500,000.
Currently, only properties priced under £125,000 on all current property owners or a £300,000 threshold for first-time buyers (FTBs) are immune from SDLT. This would mean that the new threshold would almost double the UK’s average property price which is currently £243,639.
It would also mean that, based on current levels, the average price on properties in all areas of the UK would be immune from SDLT; this includes London’s average property price of £484,584 according to the most recent HM Land Registry data.
Boris Johnson also aims to stimulate the more expensive sections of the property market by reversing George Osbourne’s duty increases on homes valued over £1.5 million by reducing the 12% duty to 7%.
Whilst this may be a welcome relief for second steppers and the whole property market, Mr Johnson also told the attendees that, if he were to become Prime Minister, he intends to freeze all new regulations until his new cabinet has the time to approve them.
This could be devastating news for leaseholders who were on cloud nine following James Brokenshire’s announcement concerning immediate leasehold regulative changes.
This could mean the ban on all leasehold new builds, an immediate ban on leaseholds being sold through Help to Buy and the 15-day deadline imposed on freeholders to provide vital leasehold information to the consumer could be delayed until in a Boris Johnson administration approves the changes.
The proposals also continue to favour middle income earners with the 40p rate of interest tax set to be imposed on earners over £80,000 as opposed to £50,000 in the present.
Lower income earners could also benefit if Johnson embraces Dominic Raab’s proposal of increasing national insurance contributions from £8,632 to £12,500.
Will the SDLT announcement have a positive effect on the property market? How will it impact FTBs?