In his Budget speech Chancellor of the Exchequer, Philip Hammond, said he would be extending the exemption introduced for first-time buyers in last year’s budget to those taking advantage of the scheme which allows people to buy a share of a property and rent the rest.
He said the tax break would be retrospective, meaning any first-time buyers who have paid stamp duty on shared ownership purchases since the last Budget on 22 November 2017, would be entitled to a refund.
In his previous budget, he abolished stamp duty for first-time buyers on properties up to £300,000. However, this did not extend to those buying shared ownership properties.
So, since the last budget, anyone purchasing through the scheme and paying – for example – £200,000 for their share would have been charged stamp duty on this. Yet, first-time buyers not using the shared ownership scheme and buying a home worth £200,000 were exempt from stamp duty on this amount.
Now, with immediate effect, first-time buyers using shared ownership schemes can claim the stamp duty relief on homes worth up to £500,000.
Ishaan Malhi, CEO and founder of Trussle, explained the purpose of the Shared Ownership scheme was to give those of more restricted financial means a route to owning their own home.
He said: “Iit’s only right that the people using it receive the same stamp duty boost as other first-time buyers.”
He added: “When the Chancellor introduced the policy last year it split opinion, with some believing that this would lead to higher house prices. This doesn’t appear to have happened and it’s difficult to argue with numbers with more than 121,000 people benefiting so far.”
More support needed
But while the announcement was welcomed, some industry experts were disappointed Philip Hammond’s move did not go far enough to address the problems facing young people trying to get onto the property ladder or the housing crisis in general.
Mike Scott, chief property analyst at estate agent, Yopa, said it was the only measure introduced in the Budget which would directly affect homebuyers or home sellers but it would only benefit very few.
And Helen Morrissey, spokesperson for Royal London, said more needed to be done to improve movement throughout the whole housing ladder.
She added: “While first-time buyers can buy a home, what of those further up the ladder who cannot afford to either move to a larger home to accommodate their growing families or those looking to downsize?
“We would urge the Government to look at reliefs for those further up the housing ladder if we really want to free up the housing market.”
Shared ownership boost
However, Kevin Roberts, director of Legal & General Mortgage Club, said the Government had clearly recognised the benefits of Shared Ownership as a genuine option for people who wanted to become homeowners.
He added: “Hopefully, this exemption will now bring about even more awareness of the scheme and make it as widely recognised as other high profile tenures such as Help to Buy.”
