The chancellor put the current housing crisis at the core of his 2017 budget. On properties worth up to £300,000, stamp duty will be scrapped with immediate effect for first time buyers
Phillip Hammond, Chancellor of the exchequer, said his plan would cut the tax for 95% of first time buyers. It would be abolished completely for 80% of them.
“I want to take action today to help young people who are saving to own a home,” The chancellor began. “One of the biggest challenges facing first time buyers is the cash required up front.”
The Tory details were unveiled to cheers in the House of Commons. The planned effect is reduce the amount that first time homeowners much save, enabling lower costs and easier access to the housing market.
However, some critics including a government watchdog have argued this would do nothing but push up the price of housing. Warnings came from The Office for Budget Responsibility that the same strategy was implemented during the financial crisis of 2008 and this led to a sharp increase in prices.
Included in the budget were plans to increase home building to 300,000 per-annum by 2025, and a policy on unused land previously proposed by the Labour Party. The “use-it-or-lose-it” strategy will target landowners who refuse to build on their property.
What is “stamp duty”?
Stamp duty is a tax levied on legal documents used in the transfer of property or assets. The documents are only legal once they have been stamped to show the tax has been paid. It was originally passed in 1765 as a tax on all paperwork used by American colonialists, and because implemented throughout the commonwealth and in some states of the USA.