First-time buyers relief costs £426m a year

On the one-year anniversary of first time buyers relief (FTBR), HMRC statistics show more than 180,500 first time buyers have benefited from the cut in stamp duty land tax (SDLT), although receipts overall were 9% lower in the past three months compared with last year

HMRC says FTBR was claimed in more than 58,800 transactions between July and September this year; an increase of 12% compared to the previous quarter. It puts the total amount saved by buyers since its introduction on 22 November 2017 at more than £426m.

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.

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 in getting onto the property ladder. Maintaining the status quo was not an option.’

HMRC’s figure show transactions increased by 11% to 307,100 between Q2 and Q3 2018, but they were 8% lower than Q3 2017. This is partially due to the devolution of SDLT to Wales in April 2018.

Residential transactions increased by 13% to 279,500 this quarter, but were 8% lower than Q3 2017.

Total Q3 2018 receipts were £3,197m, 14% higher than in Q2 2018, but 9% lower than Q3 2017. Residential receipts increased by 18% (£364m) on Q2; non-residential receipts increased by £39m, or 5%.

HMRC’s quarterly SDLT statistics are here

Report by Pat Sweet

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