Stamp duty abolition will have 'minimal' impact in the north

It is believed that a reduction in stamp duty across the UK for first time buyers will have minimal impact in Northern Ireland
Gareth McKeown

CHANCELLOR Philip Hammond held his high card until the very end of his Budget speech on Wednesday when he announced the abolition of stamp duty for first time buyers.

In the headline development Mr Hammond has eliminated stamp duty for 95 per cent of first-time buyers in the UK given the high threshold.

The abolition of stamp duty for first-time buyers purchasing homes under £300,000 and for the same amount for properties worth £500,000 or less, is at the heart of a package of Government plans to tackle the housing crisis and will save £1,660 on average.

The impact in the north though is likely to be minimal, according to senior economist at Ulster University Economic Policy Centre, Dr Esmond Birnie. He said the change will be felt less in Northern Ireland than the rest of the UK given the relatively low level of average prices.

"The Stamp Duty threshold was £125,000, the average house price in Northern Ireland would be very similar to that level."

According to the north's largest property website PropertyPal, 46 per cent of all homes for sale are priced between £125,000 and £300,000.

RICS (Royal Institution of Chartered Surveyors) policy manager in Northern Ireland, Dr Patrice Cairns believes the move may spark some activity in the local market, but will not tackle the greater issue, which is a lack of housing stock.

“Breaking it down, scrapping Stamp Duty for first-time buyers may stimulate some additional activity, but this does not tackle the underlying problem and is something of a distraction from the need to increase supply. Indeed, in Northern Ireland, the average first time buyer home is priced below the current £125,000 stamp duty threshold. Many first time buyers in Northern Ireland therefore already avoid paying stamp duty."

Nevill Crowe, director of tax at EY added that the challenges for Northern Irish property developers and house builders still remain around the long-standing problems with funding and access to finance

“The bank of mum and dad will still need to be raided by first time buyers. While the removal of stamp duty for up to £300,000 of spend by such buyers, lower average house prices in Northern Ireland compared to the rest of the UK means that this will be only of minimal benefit locally compared to existing reliefs.”

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