Southern Buyers Prosper Most From Stamp Duty Exemption
Data released from HMRC has highlighted that Southern first-time buyers (FTBs) are more likely to benefit from Stamp Duty Land Tax exemptions because more northern properties fall below the £300,000 threshold set out in the November 2017 budget.
HMRC had reported that 58,800 FTBs claimed first-time buyer relief (FTBR) in the third quarter of 2018. This means that between November of last year and November 2018, 180,500 FTBs were able to take advantage of the exemption, sharing a total saving of £426 million.
Recent figures obtained by Reallymoving.com have revealed that 75% of FTBs benefited from exemptions to stamp duty this year.
There is, however, an obvious disparity regarding which locations utilise the exemption most frequently. The data highlights that London’s microcosm of expensive property squeezed the most out of the relief. In total, London grabbed a 28% share of stamp duty savings which equated to £119 million of the total pot.
Similarly, the expensive prices in the South East of England meant that they saved £106 million, or a quarter of the total savings.
However, those in the North East only totalled 1% of the national saving, with only £5 million being saved in the region. In fact, only 39% of FTBs purchased properties over the £300,000 threshold in the North East.
In comparison, the East of England were almost able to take full advantage of stamp duty exemptions with 92% of buyers in the region benefiting from exemptions.
Rob Houghton, chief executive of reallymoving.com, said: “The Government’s Stamp Duty giveaway for first-time buyers has had little effect in the northern regions, with the impact broadly increasing the further south you go.
“The Government recognised the impact of regional house price variations when it introduced Help to Buy regional caps in the latest Budget, yet Stamp Duty continues to be applied nationally.”
Whilst house prices are currently flat, the trend of pricing increases in recent years could mean that more houses move above the threshold and more buyers will need to claim the exemptions in the future.
Should anything be done to ensure that all regions benefit fairly in the future? Should there be regional caps on the exemption?