House buyers save £1.3m on stamp duty tax
First-time buyers in the East Riding saved £1.3 million on stamp tax last year under a new Government scheme.
The policy, designed to help people onto the housing ladder, scrapped stamp duty land tax for first-time buyers paying up to £300,000 for their home, and reduced it by £5,000 for those paying up to £500,000.
But critics argue the move does not go far enough, and have called for further reform.
Figures from HM Revenue and Customs show 1,040 first-time buyers in the East Riding benefited from the tax relief scheme in 2018-19 – the first full financial year since it was introduced.
The tax authority estimates it lost a total of £1.3 million in tax income in the area, meaning each buyer will have saved an average of £1,250.
This was lower than the average amount saved across Yorkshire and the Humber, where 16,400 buyers benefited from the scheme.
In total, first-time buyers across the region kept £21 million that would otherwise have gone to the taxman.
Phil Hall, head of public affairs and policy at the Association of Accounting Technicians, said changing the system so that sellers paid stamp duty rather than buyers would be fairer and more effective.
“There is clearly no denying that First-Time Buyer Relief has helped tens of thousands of buyers, but it’s doing so in an expensive, inefficient and patchy manner,” he said. “FTBR has already cost the taxpayer £520 million in its first year of operation and it’s expected to cost almost £700 million a year by 2022-23.”
HMRC took in £35 million in stamp duty from property sales in the East Riding during the year, of which £24 million was from residential sales.
The average tax paid by each buyer was £3,069, compared to an average of £8,086 across England and Northern Ireland.
Property taxes are administered separately in Scotland and Wales.
Hew Edgar, from the Royal Institute of Chartered Surveyors, argued that the new scheme was in danger of flooding the market with first-time buyers.
HM Treasury has been approached for comment.