Late stand against big stamp duty tax for first-time buyers

Wednesday 10 September 2014

The battle is on to stop Stamp Duty changes that would see an extra £5,500 tax put on the price of a typical three-bedroom house for first-time buyers.

Changes in the Budget being debated in a fortnight would see a big rise in the cost of a getting on to the property ladder, according to Deputy John Young.

As things stand, first-time buyers pay no stamp duty on a house worth up to £300,000, £500 for a house worth up to £350,000, £1,000 on a house worth up to £400,000 and £1,500 on a house worth up to £450,000.

But the Budget proposed by Senator Philip Ozouf would see the discounts for first-time buyers changed, so that a home worth £450,000 would be liable to £7,000 in stamp duty.

Deputy Young says that instead of hiking up the duty, the States should keep the limit where it is and forego the extra £277,000 in revenue.

He said: “The presentation of the Draft Budget 2015 changes for Stamp Duty is complex.

“It has been presented as a measure to assist home ownership but, in reality, I believe for first-time buyers of properties priced between £400,000 and £450,000, the tax proposals will have the reverse effect by imposing an effective tax rate of 11% on the excess value.

“This is a much higher tax rate than applied to purchases of very high- value properties and will distort the property market.”

The most recent figures showed that a typical three-bedroom house now goes for £508,000.

Senator Ozouf and Deputy Young have both recently announced that they will be standing for Senator in the elections on 15 October.