Before Boris Johnson became the new PM, he outlined his plans for an emergency budget which would significantly cut stamp duty and potentially reignite a stumbling property market.
With Boris Johnson beating rival, Jeremy Hunt by 92,153 votes to 46,656 last month, the question on everyone’s lips is whether he will deliver on his promise of cutting stamp duty land tax (SDLT).
As Brexit, economic uncertainty and fulfilling policy pledges play heavily on his mind, overhauling SDLT will undoubtedly be the easiest part of Johnson’s role as PM.
In his quest to revive the property market, Boris pledged to overhaul the current 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.
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%.
Today’s Conveyancer asked industry professionals what it will mean for the UK property market now that Boris Johnson is the new Prime Minister and whether the new PM will be positive for the sector.
Mitesh Lala, residential property solicitor at Higgs & Sons Solicitors said:
“Other than being an obvious market stimulus, the pledged scrapping of stamp duty on properties valued up to £500,000 would give a significant boost to the conveyancing of properties valued at the top end between £400,000-£500,000, where the alternative might have been for a growing family to extend their current home. Whilst the extension to permitted development encouraged homeowners to expand the size of their properties rather than move to a larger home, this new change will give them food for thought when the saving could be as much as £15,000. Buying a ready-made property certainly has its advantages over living amongst brick dust on a home building site! Their existing home would in turn be more affordable for smaller families.”
Paul Sams, Partner at Dutton Gregory Solicitors further adds. He said:
“Love him or hate him, Boris has two major assets. Firstly people recognise who you mean when you say his forename only and secondly he is massively enthusiastic about life in general. The effervescence about the man even resonates with those who are diametrically opposed to him. He is in favour of property ownership and for building more homes so that is a positive thing. During his time as London Mayor the value of property in London rose by over 50% from 2008 to 2016. Now I know that we had an almighty price correction in 2008 but it is a proven fact that a rise in property prices is a good thing for most people and the economy as a whole. Boris has spoken extensively on his plans, although clearly not fully formed at the time he spoke, of how to reform stamp duty land tax that certainly a lot of Agents I know feel would help to stimulate the market.”
As a conveyancer, what is your opinion? will the new PM have a positive impact on the UK property market as a whole?
2 Responses
Surely this will have a negative effect on the property market overall. As someone who is presently looking to purchase a second property for a medium term investment for rental purposes with a small gain on the sale value in 3-5 years. There is almost no point because I will have to pay stamp duty as a buyer and even more as a seller if Boris’ plans go ahead. Boris is a clever man and I don’t believe he has thought this through terribly well. People wishing to downsize (such as my father) will now plan to stay in their home in order to avoid paying stamp duty on a property where no future IHT would be due by his children. So many elderly people will opt to stay put instead of leaving their 3/4 bed semi and moving into a small bungalow.
Surely the point isn’t to help people who just fancy making an investment, but people who are desperate to get on the property ladder at all… or upsize due to a growing family.
that means us non owners have another available place rather than being priced out by another investor or portfolio manager