More than 180,500 first time buyers have saved a total of £426 million through First Time Buyers Relief, according to HM Revenue and Customs statistics
The money-saving tax relief, known as First Time Buyers Relief (FTBR), was introduced on 22 November 2017, and new figures released on the eve of the one-year anniversary show that the estimated total amount saved by buyers is more than £426 million.
In last month’s Budget, the relief was extended to first-time buyers purchasing through approved shared ownership schemes who choose to pay SDLT in stages, rather than on the market value of the property. This has been retrospectively applied to eligible property transactions since last November.
Mel Stride MP, Financial Secretary to the Treasury, said: “These statistics show that the government was right to offer a helping hand to first time buyers. Without this investment, more than 180,500 new homeowners may have struggled to get onto the property ladder. Maintaining the status quo was not an option.”
FTBR is a SDLT relief for eligible first-time buyers. The tax relief can be used when buying a residential property where the purchase price is no more than £500,000 in England and Northern Ireland, as long as the purchaser does not own any other properties and intends to use it as their main residence.
The relief was claimed in more than 58,800 transactions between July and September this year, an increase of 12% compared to the previous quarter.
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The hsg mkt is multiple sub-mkts. The 1st time buyer sub-mkt is smaller, cheaper properties in particular locns with some properties newly built for it.
Recent taxation changes give ONLY FTBs the distinction of paying less PURCHASE TAX on these lwr value properties.
In the short-term, this probably gives a one off advantage for a short period of time. As mkts quickly adjust, prices in the sub-mkt will rise to absorb the change so that, in the long term, it accrues to LANDOWNERS/DEVELOPERS not purchasers.
Prices are determined by MONEY SUPPLY available to purchasers. Reducing taxes raises MS & PRICES. Ill thought out interventions are ineffective & have unintended consequences. This measure sounds good POLITICALLY but will be impossible politically to remove AFTER the mkt has adjusted & the Treasury will suffer a tax loss FOR EVER.
So, TAXPAYERS have lost £426m but FTBs have not “saved” it, as claimed.