More than 180,500 first time buyers have pocketed the cash they would have spent on Stamp Duty Land Tax (SDLT) for their new homes, statistics published by HM Revenue and Customs (HMRC) reveal.
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.
The quarterly SDLT statistics, including the latest figures for FTBR were published on 21 November. You can read the latest statistics.
The relief applies only to purchases in England and Northern Ireland, SDLT is devolved in Scotland and Wales.
The amount of relief reported should not be used to infer average house prices for first time buyers; first time buyer purchases below £125,000 and above £500,000 are not included in the statistics as they are below the lower SDLT threshold (£125,000) or ineligible for the relief (above £500,000). For purchases up to £300,000 no SDLT is payable.
Where the purchase price is between £300,000 and £500,000, SDLT at 5% is due on the amount above £300,000. For example, a property purchased for £450,000 would pay £7,500 SDLT (5% of £150,000). This gives a saving of up to £5,000 for each first time buyer.