Following a bold move in last week’s Budget, first-time buyers will no longer have to pay Stamp Duty Land Tax (SDLT), as long as the home they are purchasing is valued at £300,000 or less.
Meanwhile, if they are buying a property worth £500,000 or less, they will not pay SDLT on the first £300,000 of its value, it has been confirmed.
The changes come as part of a “big package” for housing unveiled by the Chancellor, Philip Hammond, as part of last week’s Autumn Budget announcements.
According to the Mr Hammond, the Government’s bold SDLT reforms will cut the tax for 95 per cent of all first-time buyers.
Meanwhile, 80 per cent of newcomers to Britain’s property market will not have to pay any SDLT at all, he said.
However, the Chancellor has faced widespread criticism since the changes were first announced.
Last week, the Office for Budget Responsibility (OBR) estimated that the change would push up property values by approximately 0.3 per cent.
Due to this, struggling first-time buyers will be adversely affected by the change, it said, while only existing homeowners will gain, it added.
Prominent think tank, the Resolution Foundation, has voiced similar concerns.
In recent days, it has estimated that the change could cost first-time buyers more than twice as much as it saves them – claiming that house prices will inflate by as much as £3,200.
However, the think tank has acknowledged that the policy will still help to reduce the average time it takes a first-buyer to save up enough money to buy their first home.