First-time buyers feel pain of stamp duty cut
FIRST-TIME buyers could lose a crucial edge in the housing market after Rishi Sunak’s stamp duty cut boosted the hand of landlords and homeowners seeking to move up the ladder, the Institute for Fiscal Studies has warned.
The tax break on properties worth up to £500,000 applies to all buyers – overriding a perk that allowed firsttimers to pay lower rates than everyone else. The think tank warned that there would be more competition as a result, pushing up prices and ultimately giving sellers the biggest boost.
Helen Miller, of the IFS, said: “When there is a tax break, it can lead to the price of houses going up, so sellers can benefit. When the break was just for first-time buyers, it was more likely they would retain some of that benefit.
Now it is across the whole market, it is more likely that prices will rise, so firsttime buyers could be left keeping less of the discount.”
However, the IFS still praised the move and said it would boost the economy by powering up activity in the property market.
Stamp duty used to kick in at £125,000, but first-time buyers only started paying at £300,000.