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Tax Breaks - Tim Betts, Taylor Wimpey

Tax Breaks

Tax Breaks – making the most of a duty-free holiday
As anyone who has bought a new home knows, the price of a property is never the full story. Add to that the cost of searches, solicitors, stamp duty and removals, and any hard-negotiated savings on the asking price are soon wiped out.

That’s why the raising of the stamp duty threshold to £250,000 is widely seen as a very welcome piece of budget legislation for first-time buyers.

They’ll save up to £2,500 on the cost of purchasing a home, and while 1% of the purchase price may sound to some like a drop in the ocean, for many it will knock months off the time it takes to get together the required deposit.

According to leading lender Santander, the stamp duty holiday could benefit as many at 3.8 million potential first-time buyers, and it is now offering 90% mortgages on selected new homes for sale at Taylor Wimpey developments. Combined with an extra 5% contribution by the housebuilder, qualifying first-time buyers can once again secure a home with just a 5% deposit from their own pocket.

This puts the prospect of owning property within reach of thousands of potential first-time buyers, many of whom have had to continue to line their landlords’ pockets. Although monthly mortgage repayments were within their budget, they couldn’t afford to get over the initial cost hurdle of purchasing a home.

A positive effect on the market
The fact that a stamp duty holiday has a positive effect on the market was demonstrated very clearly at the end of last year, when the duty-free threshold – then raised to £175,000 – was due to come back down to £125,000 on 1 January 2010. The Council of Mortgage Lenders recorded a 23% increase in loans made to buyers in December 2009 compared with the previous month, and a 26% increase in loans to first-time buyers in the same period.

With this sort of increased market movement, existing homeowners looking to step-up to a property over the new £250,000 threshold can also consider the stamp duty holiday to be good news. The cycle of home buying will continue to spiral upwards through the market, cutting the time it takes to find a purchaser for properties they may have been struggling to sell.

New opportunities
It’s also the case that the extended range of the new stamp duty free zone – properties up to £250,000 rather than £175,000 – has opened up new opportunities for a wider range of buyers.

In the new homes development locations in which I work, a region that includes Berkshire, Buckinghamshire, Hampshire, Middlesex and Surrey, property values are significantly higher than in other areas of the UK, yet we make a great selection of new build apartments and two and three-bedroom houses available for under £250,000.

We can also consider making a contribution towards customers’ legal fees or provide free removals, or offer to pay the stamp duty for those buying selected new homes worth more than £250,000.

Perks such as these go a long way towards cutting out that often prohibitive cost of moving, and are proving essential in helping the property market recovery to continue.

Tim Betts

Tim Betts is Sales and Marketing Director for Taylor Wimpey West London, which has new homes developments in Berkshire, Buckinghamshire, Hampshire, Middlesex and Surrey.

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