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  1. ITV Report

Stamp duty cut: What you need to know as Chancellor scraps tax for first-time buyers

  • Video report by ITV News Consumer Editor Chris Choi

Stamp duty is to be abolished for first-time buyers on properties up to £300,000 with immediate affect, Chancellor Philip Hammond has announced in his Budget.

  • Who does the measure apply to?

The cut will permanently raise the price at which a property becomes liable for stamp duty to £300,000 for first‑time buyers in an attempt to help young people buy their first home.

It does not apply in Scotland as stamp duty was devolved to Scotland in 2015.

The measure will apply in Wales until 1 April, 2018, when stamp duty will be devolved to Wales.

  • What if a property is sold for more than £300,000?

The measure will also apply to the first £300,000 of a purchase in high-price areas such as London, up to £500,000.

The relief will not apply for purchases of properties worth more than £500,000.

Stamp duty rates under the new system. Credit: gov.uk
  • How many people will this affect?

The Government says 95% of first-time buyers that pay stamp duty will benefit to some extent, and 80% of first-time buyers will pay no stamp duty at all.

The Treasury says the change will save purchasers up to £5,000.

However, the Office for Budget Responsibility said first-time buyers would actually end up paying more, ITV News Political Correspondent Carl Dinnen reports:

Others said the measure could inflate house prices causing more problems in the property chain.

Jeremy Raj, of Irwin Mitchell Private Wealth, said: "This could lead to some prices going up, and sellers digging their heels in on price when dealing with first-time buyers - working exactly against what it intended to do."

  • How much will the change cost?

The Government predicts the cut will cost it just under £3.2 billion by 2023.

  • What does Labour think?

Labour leader Jeremy Corbyn said his party backed the measure because it was in its manifesto for June's general election.