The Chancellor of Exchequer Sajid Javid has announced his first budget following the General Election, and it will take place on 11th March.
Acknowledging that the property market needs a boost following the lull in confidence caused by the EU referendum, Boris Johnson promised to reform Stamp Duty Land Tax (SDLT), and it remains to be seen if Mr Javid will deliver on this promise. Javid did, however, say his immediate plans included ‘delivering on the Government’s promises on tax’.
During the election campaign Johnson said he would remove SDLT from all house sales under £500,000, and also shifting the responsibility for paying stamp duty from the buyer to the vendor
“People across the country have told us that they want change. We’ve listened and will now deliver,” Javid said.
Relieving some of the stamp duty burden would be very welcome, but won't in itself be a perfect solution. Many first time buyers don't pay stamp duty anyway, as many won't buy properties over the £300,000 threshold - increasing this to £500,000 won't make any difference to them. In Skelmersdale, and many North West towns, it's simply business as usual.
First time movers, however, (those selling their first homes and trading up) will benefit. The importance of those selling for the first time in the market is often overlooked, as without those sellers, there is simply no stock for the first time buyers to buy. This could be an added incentive for people to trade up, releasing more properties into the market.
The government really needs to consider removing, or at least reforming, the frankly stupid SDLT surcharge imposed on those who already own another property. I can, to an extent, understand the government wanting to discourage people from buying second homes in areas where local people are struggling to afford local properties, but a devastating side effect has been that property investors also have to pay the surcharge, which in turn, throttles supply of rental properties, as it puts investors off buying them.