First-time buy­ers feel pain of stamp duty cut

The Daily Telegraph - Business - - Front Page - By Tim Wal­lace

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.

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