Budget 2017 – Hammond axes Stamp Duty up to £300k for first time buyers in Budget aimed at winning over young and poor
FIRST-TIME buyers no longer have to pay Stamp Duty on homes less than £300,000 with immediate effect, Philip Hammond announced today.
The Chancellor made a radical bid to attract young voters and poorer workers in his Budget with reforms to housebuilding, Universal Credit, the living wage and youth railcards.
He used the make-or-break statement to try and win back voters attracted by Jeremy Corbyn's programme of high spending and high tax, easing the pace of austerity with giveaways to groups of voters.
And the Chancellor also attempted to leave behind his image as a gloomy "Eeyore" who is obsessed with the dangers of Brexit.
Mr Hammond vowed that "no one should doubt our resolve" as he announced a new £3billion fund to prepare for leaving the EU.
The Chancellor's speech was billed as a crucial moment for him, Theresa May and the whole Government - but the early reaction from Tory colleagues was largely positive thanks to his bold offers to the young.
In a speech laced with dry wisecracks, Mr Hammond set out a vision for "a Britain fit for the future" - including £1.5billion reforms to Universal Credit and an extra £13billion for the NHS.
But he left the biggest surprise for the very end when he revealed that Stamp Duty would be cut for first-time buyers on all houses worth less than £300,000 in a move set to raise house prices across the board.
He was dealt a blow by squeezed economic growth - announcing today that the national spending watchdog is downgrading forecasts for years to come thanks to low productivity in the workforce.
Today's announcements include:
- A rise in the national living wage to £7.83, and an increase in the threshold for paying income tax
- Measures to boost housebuilding so that Britain starts constructing 300,000 new homes every year
- A hike in tax on diesel cars to persuade drivers to switch to cleaner vehicles
- The scrapping of the planned rise in fuel duty
- An extra £300million towards the building of the HS2 railway line
- New taxes to discourage the use of plastic packaging
- Cash for struggling cities and commercial research in firms and universities
- A freeze to duty on wine, beer and spirits with a hike in tax on super-strong booze such as white cider
- Higher duty on cigarettes which are set to drive a pack above £10
- £40million to train up maths teachers and bonuses for schools which encourage their pupils to take the subject
- Reforms to business rates limiting how quickly they will rise - and an end to the hated Staircase Tax
- A £28million grant to Kensington council to help survivors of the Grenfell Tower disaster
- New cash to ensure that the Government and businesses are ready for Brexit
But the need to balance the books meant that Mr Hammond was unable to announce any large tax cuts or boosts to public spending.
This morning the PM gave public backing to Mr Hammond with a supportive tweet - just hours after Number 10 took control of the Budget, forcing the Treasury to announce more of its measures in advance.
And he was also under pressure from Brexiteers who don't believe he has the heart to deliver our EU exit with the passion and enthusiasm needed.
Mr Hammond had been expected to lower Stamp Duty for first-time buyers - but instead he abolished it altogether for most.
He said: "With effect from today, for all first-time buyer purchases up to £300,000, I am abolishing Stamp Duty altogether.
"To ensure that this relief also helps first-time buyers in very high price areas like London, it will also be available on the first £300,000 of the purchase price of properties up to £500,000 - meaning an effective reduction of £5,000.
"A Stamp Duty cut for 95 per cent of all first-time buyers who pay Stamp Duty, and no Stamp Duty at all for 80 per cent of first-time buyers from today."
The Chancellor added: "When we say we will revive the home-owning dream in Britain, we mean it.
"We do not underestimate the scale of the challenge - but today, we have made a substantial downpayment."
The Office for Budget Responsibility suggested the measure would help an extra 3,500 people buy their own home every year - but could push up house prices.
In another effort to try and win over young voters, the chancellor announced that the popular 16-25 year old railcard will be extended to everyone under 32.
The card costs £30 but knocks a third off the cost of train journeys - saving passengers £150 a year on average.
Earlier he revealed that the delay for benefits claimants moving on to Universal Credit will fall from six weeks to five, and anyone who needs state cash to pay their rent will get the money during that waiting period.
And in another boost for the low-paid, Mr Hammond said the national living wage would rise from £7.50 an hour to £7.83, while no one will pay income tax on earnings below £11,850.
He announced a £13billion boost to the NHS - £2.8billion to plug the hole in day-to-day spending from now until 2020, and another £10billion on long-term investment.
Opening his Budget speech in the Commons, the Chancellor said: "We are determine to ensure that the country is prepared for every possible outcome.
"We have already invested £700million in Brexit preparations - I am setting aside another £3billion.
"No one should doubt our resolve. Either we embrace the future or build on Britain's great global success story, or - as the party opposite advocates - reject change and turn to the irrelevant dogmas of the past.
"We choose the future - we run towards change, not away from it.
"We must invest to secure that bright future for Britain, and that is what we choose to do today."
Mr Hammond promised to make Britain ";a beacon of creativity, a civilised and tolerant places that nurtures the talents and cares for the vulnerable, a force for good in the world".
He added: "That is the Britain I want to leave to my children - a country fit for the future."
He then revealed that the Office for Budget Responsibility has cut its forecasts for future economic growth in the UK over the next five years.
The Chancellor vowed to build 300,000 new homes a year - ploughing £44billion in spending and loans into the market to make sure there are enough houses for the population of the future.
He also announced new training schemes for tens of thousands of brick-layers and electricians to ensure that Britain’s construction industry is not hit by Brexit.
And in a U-turn which will delight small businesses, the Chancellor decided not to extend the reach of VAT to tiny firms which were previously exempt from the tax.
Mr Hammond announced two more measures designed to ease the pressure on struggling small firms.
He revealed that business rates will be linked to CPI inflation rather than the higher RPI index from next year.
And he promised companies they will not be hit by the Staircase Tax, which raised the bill for firms with more than one storey in their office.
The scrapping of the Staircase Tax is a win for The Sun after we highlighted the impact it has on entrepreneurs.
Schools and sixth form colleges will get an extra a £177million package to promote maths - including a £600 bonus in funding for every new student who takes the subject at A Level.
And there will be £42million to boost teachers’ training in schools that have fallen behind, and £84million to triple the number of computer science teachers
MOST READ IN POLITICS
Take-away boxes, plastic knives and forks, and bubble wrap could be taxed as part of efforts to clean up the environment.
Hammond called for an inquiry into taxing every-day, single-use plastics.
It follows ministers' recent moves to put a 5p charge on plastic bags and ban harmful micro-beads.
In another green initiative, Mr Hammond announced a rise in road tax on diesel cars - which will be spent on clean air schemes in polluted cities.
Other measures include £400million for electric car charge points, £75million for research into artificial intelligence, £100million to boost clean car sales, £160million for 5G mobile networks, £100million to hire 8,000 computer science teachers and £76million for digital and construction skills training.
Markets showed little reaction - which may come as a relief to the Chancellor as he tries to avoid creating more chaos.
Responding in the Commons, Jeremy Corbyn predicted the Budget would "unravel" within days.
He said: "The reality test of this Budget has to be how it affects ordinary people's lives.
"I believe as the days go ahead and this Budget unravels, the reality will be a lot of people will be no better off and the misery many are in will be continuing."
The Labour leader then accused Tory MPs of being "uncouth" after he was heckled while berating the Chancellor over his failure to mention social care.
Mr Corbyn said: "The uncaring, uncouth attitude of certain members opposite needs to be called out."
How a Stamp Duty cut will help first-time buyers get on the property ladder
FIRST-TIME buyer Anna Walker has been saving for a deposit for years but as struggled to claw enough cash together due to the high cost of renting and starting a family.
The 33-year-old wants to buy a three-bedroom semi-detached house in Staines-upon-Thames, Surrey.
“Our daughter arrived a little quicker than we anticipated, so it took longer to get finances into place,” she said.
Mr and Mrs Walker made the tough decision to move into a one bedroom flat after Ava was born, in a bid to claw back some savings.
“Not ideal with a young baby but had to be done,” she said. “Luckily, my in laws offered to kindly help towards our final deposit.”
Mrs Walker, a secondary school teacher, said that Stamp Duty has “massively” affected their budget.
“With every house we've looked at, we've considered the Stamp duty – it’s easily another ten thousand pounds on top of our deposit. We have always had to keep it in mind when budgeting.”
Currently, the rate of Stamp Duty you'll pay depends on where in the UK you're buying a property. England, Wales and Northern Ireland have the same rates, Scotland uses different rate bandings.
The tax is calculated on the part of the property purchase price that falls within each band. For example, if you buy a house for £275,000, the amount you will owe is calculated as follows: 0% on the first £125,000 = £0, 2% on the next £125,000 = £2,500, 5% on the final £25,000 = £1,250. For a total of £3,750.
Mrs Walker, 33, said that if it wasn’t for the financial help from her husband’s parents, they would not be able to finally move into the family home they long for.
“If it wasn't for Joe’s parents being so extremely generous and able to help, we wouldn't be able to buy. It is as simple as that.