Analysis has revealed that a tax relief introduced to help people get onto the property ladder has resulted in 25,000 extra sales to first-time buyers. First Time Buyers’ Relief (FTBR) increases the threshold at which first time buyers pay Stamp Duty Land Tax (SDLT) and was introduced in November 2017.
An evaluation report from HMRC reveals today that in its first year the tax relief boosted first-time purchases by 11% for properties worth between £125,001 and £300,000, and 18% for houses worth between £300,001 and £500,000 – equating to an extra 25,000 homes bought by first time buyers in one year alone.
Victoria Atkins, Financial Secretary to the Treasury, said: “We are doing all we can to make the dream of home ownership a reality. “First Time Buyers Relief is making a real difference and it’s just one of the ways we are helping people get a foot on the property ladder.”
Last year the government increased the thresholds for the tax relief to support the housing market in response to the challenges the property market is facing in a difficult economic period. Currently properties valued below £425,000 do not pay any Stamp Duty Land Tax (SDLT) whilst properties worth between £425,001 and £625,000 pay 5% SDLT.
These increases are in place until 31 March 2025, after which they are planned to revert to their original thresholds of £300,000 and £500,000, meaning that nearly 70 per cent of those claiming First Time Buyers Relief, continue to pay no SDLT whatsoever.
First Time Buyers Relief is one of many measures which have been introduced by the government to help people get on the property ladder.
This includes the First Homes scheme, which offers properties to first-time buyers at 30-50% off the market rate. Shared Ownership meanwhile gives first time buyers the option to buy a share of their home (a minimum of 10%) and pay rent on the remaining share.
The Mortgage Guarantee Scheme has also helped more than 35,000 households get on the property ladder since 2021. It sees the government offer lenders the financial guarantees they need to provide mortgages that cover 95% of the loan, subject to affordability checks, on a house worth up to £600,000.
The government has also introduced the Lifetime ISA, which allow those aged 18-40 to save or invest up to £4,000 per year, receiving a 25% government bonus on their savings.
Since 2010 more than 837,000 households have been helped to purchase a home through government-backed spending schemes in addition to all those who have benefitted from the SDLT reliefs.