The tax paid after purchasing a home, otherwise known as stamp duty, will be cut drastically in 2018. The reduction will be instituted to help first-time home buyers save money on properties listed below £300,000. Phillip Hammond announced the offering late last week in the hopes of enticing the younger generation into home ownership.
Stamp Duty Tax Cut
Theresa May and company are extremely excited for the potential of this adjustment designed to kick-start the struggling housing market. By government’s projections, stamp duty will save first-time home buyers an average of £1,660. Estimates show more than one million citizens could benefit from this new tax plan, but critics believe that Hammond’s statistics do not tell the whole story.
Independent analysis performed on the subject predicts the stamp duty will only result in 3,500 new home buyers in the next year. The study concluded the lowered tax will cause home-sellers to list their homes at higher prices, and stamp duty could be abused by first-time buyers. Many believe this “millennial-friendly” tax cut could quickly turn into a nightmare. Will Hammond and May revise this plan or simply see how it plays out in the first half of the next calendar year?
London Home-Sellers Are Desperate
The rate at which London home-sellers are dropping the prices of their properties is very alarming. More than a quarter of sellers recently re-listed their homes at a lower price, signaling an even more intense decline of the once booming market. The average prices have lowered to a figure not seen since the overall regression of the industry in 2010. Slashing the listing prices is not the only troubling trend in the housing market – total price growth is now at its weakest pace in five years. Most citizens are left to wonder if stamp duty can really be a remedy for this widespread issue throughout the UK housing market.