Chancellor Philip Hammond has abolished stamp duty for most first-time home buyers in England and Wales.
In his autumn budget, he announced that the first £300,000 of the price of a property will be exempt from tax for people entering the housing market for the first time. The change came into effect immediately.
He said the change means 95% of first-time buyers will now pay no stamp duty at all, providing them with a saving of up to £5,000, depending on the purchase price.
Mr Hammond also promised that the government would deliver 300,000 new homes a year, and pledged an investment of £44 billion to get more housing projects started.
The government had already announced that it would spend £10 billion to provide 135,000 new homes through the Help to Buy Equity Loan scheme.
More than 130,000 properties have already been sold through the scheme, which helps people buy a new-build home with only a 5% deposit.
The new funding means that a Help to Buy Equity Loan could help another 135,000 people by 2021. This would bring the total number of households across England that would be supported through the scheme to around 360,000.
Four out of five home purchases using the equity loan scheme have been made by first-time buyers, helping the total number of first-time buyers to increase by 70% between 2010 and 2016.
The equity loan scheme launched in April 2013 and funding has been committed until 2021. It works by the government providing an equity loan of up to 20% which is repaid when the home is sold, or after 25 years, whichever comes first.
No interest or repayments are due during the first 5 years of the loan.
The Help to Buy Equity Loan can be used to purchase a new-build property up to the value of £600,000, with a maximum equity loan of £120,000 (20%). In London, applicants can
claim an equity loan of up to 40% of the purchase price.
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