Thousands of housebuyers in Greater Manchester to benefit from stamp duty change
Thousands of housebuyers in Manchester are set to benefit from stamp duty being axed on homes under £300,000.
The move, announced in Chancellor Philip Hammond’s Budget, could potentially unlock the housing market for the so-called ‘Generation Rent’.
It will see the goverment stamp duty fee abolished for first time buyers on homes costing £300,000 or less or on the first £300,000 of purchases up to £500,000.
According to Rightmove there are 10,833 properties across Greater Manchester that will now be removed.
While the move has been criticised by some – including the government’s own financial watchdog – for being potentially open to abuse by non-first time buyers, local property experts say it will definitely go someway to helping those struggling to get a foot on the ladder due to affordability.
So how can first time buyers take advantage of this headline-grabbing perk and will it really help?
“This change is a real benefit”
While the stamp duty abolition is welcome, the largest financial hurdle to buyers will always be the deposit.
Average price of a first-time property in the UK is £208,000, with the current average deposit for a house in the north west currently standing at £35,075.
But the move is definitely a step in the right direction.
Ann Irwin, residential property partner at city centre law firm Slater Heelis, said: “For first time buyers, this change is a real benefit.
“Stamp Duty should always be a factor in any affordability calculation so now money ear-marked for tax could be used to boost a deposit.
“This is a change, not a stamp duty holiday so there is no time limit and it can be used on second hand properties not just new build homes which will have a bigger effect right across the market.
“It can also be used in conjunction with other incentives like Help To Buy ISA’s and Help To Buy on new build homes.”
To make the most of the tax break first time buyers should be targeting properties at the top of the band which might not leave a lot left for renovations and improvements.
So the logic now may be to find a property that pushes your budget but requires no work.
Here are examples of three properties which could fit the bill:
This three-bedroom semi at Egerton has a new extension to go alongside bags of character and great views.
If you can keep to £300,000 you would save £5,000 in tax.
In Altrincham this three bedroom semi has off street parking and a south facing garden and a lovely open plan kitchen/diner.
Or a two-bedroom apartment in Manchester city centre with bags of character and some outside space.
“We will save £1,000 thanks to the move”
Dale Sullivan says axing the Stamp Duty break will make him focus again on buying a property.
The 31-year-old, from Withington, had been saving for a deposit but with property prices increasing at a faster rate decided to use the money instead to back to college and study for an MA alongside working for a city centre property investment firm.
He said: “I decided it would be a better investment in the long term. I used to live in the city centre but moving further out means the rents are more affordable which allows me to save.
“I think axing stamp duty is a significant move for first time buyers.
“My budget is around £180,000 so I will save £1,100 which I can put towards other costs like legal fees.
“I had been worried about rising interest rates but this has brought buying my first house back into focus.”
James Turner and Emily Simpson are delighted with the stamp duty change for first time buyers.
They have reserved a three-bedroom house on Keepmoat’s Riverbank View at Charlestown in Salford for £174,995 and were facing a stamp duty bill of £999.90 (0pc up to £125,000 then 2pc on the remaining £49,995)
James, who works at Salford University, said: “Stamp Duty is a fairly sizeable factor in buying your first house and to suddenly be told we don’t need to pay means a lot less pressure on our finances.
“We are going to use the money to either upgrade the kitchen or get the back garden turfed but we could have used it to reduce the mortgage.”
The couple are due to move in next March and Emily, a nurse at Salford Royal Hospital, said: “We like the idea of new build. It will all be brand new to us and will not need any extra work – we can just enjoy living here.
“It is in the right location, the right budget and the stamp duty news is an extra bonus.”
How do you qualify for the stamp duty giveaway?
Am I eligible?
Knowing you are truly a first time buyer.
If you are buying a house with a partner, both of you need to be first time buyers to benefit
Financial assistance from parents is allowed as long as they are not legally part of the transaction
If you have previously inherited a property you won’t benefit from the stamp duty freeze
When does it come into force?
If you have just completed on your first purchase, even as recently as 21 November, then the stamp duty is payable.
If you are still yet to complete by Budget Day (22 November) then there will be no stamp duty to pay.
If you have reserved a new build property off plan but not completed it will not be liable to stamp duty.
How much will you save?
Properties up to £300,000 are now removed from Stamp Duty
Stamp duty is payable at 5% on the amount over £300,000 up to a maximum of £500,000. For example, on a property valued at £319,000 you have to pay 5% of £19,000 which is £950. Previously the stamp duty would have been £5,950
Can I purchase a buy-to-let property and benefit from Stamp Duty savings?
A first-time buyer is someone who has never owned a freehold or leasehold and is purchasing their only or main residence. So, if you intend to let-out your first property, you will still have stamp duty to pay.
I’m buying a new house and stamp duty was included in the deal. What can I do?
Developers are increasingly offering incentives on new build properties. If you have already agreed a deal that includes stamp duty, negotiate other extras such as carpets or fitted wardrobes or legal fees.
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