Chancellor Phillip Hammond has announced that he is abolishing Stamp Duty for first-time buyers on purchases of up to £300,000, and on the first £300,000 of purchases up to £500,000.
Surely this must be good news, right?
Well, let’s look at the facts…
Before the Budget, there was no stamp duty to pay on the first £125,000 of the purchase price of any property.
Pre-budget Stamp Duty rates
£250,001 – £925,000 5%
£925,001 – £1,500,000 10%
So, if you were a First Time Buyer, buying a property at £300,000, this meant you would have been liable to pay Stamp Duty of £5,000.
Since the budget, you do not need to pay any stamp duty on a purchase up to £300,000.
That’s £5,000 which you no longer needs to find!
Let’s say that you think you are in a position to pay £300,000 for your first home in the Watford area. You’ve spoken to your bank or building society, and they have agreed to lend you £270,000, based on your financial situation and you think can you save a £30,000 deposit. If you are in a position to save £1,000 per month, that’s going to take you 2 and a half years to save the deposit. Previously, you would have needed to save the stamp duty too, a further 5 months. Let’s look at what that 5 months means, in real terms…
- 5 less months of living with your parents and your annoying younger brother/sister. Worse still, you could be living with your partner’s parents, and his/her annoying younger brother/sister!
- 5 less months of hiding in your bedroom, so that you can watch what YOU want to watch and not have to watch the Antiques Roadshow or Newsnight.
- 5 less months of not being able to sit watching the TV in your pants in the living room
- 5 less months of being on your best behaviour and being expected to tidy up, do the vacuuming, and the washing up.
Basically, this cut in Stamp Duty will not just save you money, it will save your relationships, AND your sanity!
And, if you don’t have to save £1,000 per month for the stamp duty, that means you can spend it on fun stuff…like 50 take away Pizzas or 100 trips to the Cinema or 160 bottles of Prosecco or 250 pints of lager!!
So, embrace the cut in Stamp Duty, buy your first home sooner, and enjoy spending the stamp duty on things you really want!
For all of your Watford property enquiries, contact us on 01923 296747.
Disclaimer: Prices of Pizza and Prosecco may go up or down. Your Pizza may be at risk if you leave it where the dog can reach it. Please drink responsibly.