Government Urged to Include Shared Ownership in Stamp Duty Shake Up

Stamp Duty Land Tax was one of the main subjects of the Autumn 2017 budget. For first time buyers purchasing properties up to £300,000, the Stamp Duty Tax was abolished. As a result, it was believed that the savings for would-be buyers could be put towards a deposit. Prime Minister Theresa May has stated that over 16,000 property buyers have saved money through the scheme, following its introduction in November.

However, for shared ownership buyers aren’t fully benefiting from the stamp duty tax cut. Properties with higher asking prices still require the payment of stamp duty which is a costly addition to buying a home. This is particularly relevant for first time buyers in London where asking prices are high. For example, a shared ownership purchaser buying a home for £500,000 will still have to pay an additional £2,500 in stamp duty, even though they would be paying half the amount of the asking price.

Housing associations have now approached the government seeking changes to the stamp duty rules. It is understood that the providers have also approached the Homes and Communities Agency (HCA) to open a dialogue and hopefully discuss altering the scheme.

Chair of the National Housing Group and Assistant Development Director Amy Nettleton agrees that the end of the Stamp Duty Tax for certain properties is a relief for first time buyers struggling to enter the housing market. However, she also emphasises that failing to consider shared ownership will “seriously impede the work going on to champion these homes”.

Presently, shared ownership buyers choose to either pay stamp duty for the full value of the property or for their own share. The problem with the latest stamp duty reduction is that it only applies to the full market price. If the full property value is over £300,000 stamp duty will still need to be collected, despite the buyers only owning a share of the property.

The cut to the Stamp Duty Tax has certainly benefitted property buyers. For first time buyers, they are more likely to get on the property ladder with the savings made from not having to pay stamp duty. Nevertheless, for everyone to fully benefit, Stamp Dutyrules still needs to be altered so that it can be applied to shared ownership buyers.