Nicola Sturgeon considers more help for first-time house buyers
Nicola Sturgeon will consider more help for first-time buyers after a major Scottish housebuilder announced it will move to adopt the Chancellor's Budget relief measures north of the Border.
But the prospect of fresh help for house hunters in Scotland at next month’s Budget could be blocked by the Greens, who oppose the move and whose votes may be needed by an SNP government that is now a minority.
Philip Hammond’s flagship Budget announcement on Wednesday was the abolition of stamp duty for homes worth up to £300,000 in England and Wales, but it will not apply in Scotland where the Scottish Government has responsibility. Instead only homes up to £145,000 in value are exempt from the land and buildings transactions tax system (LBTT) that applies north of the Border.
Ms Sturgeon told MSPs yesterday she will “consider whether it is appropriate to give any further assistance” to first-time buyers in the Scottish Government’s forthcoming Budget.
She hinted that a figure of £175,000 would be the Scottish equivalent of a £300,000 home south of the Border, in terms of the proportion of buyers affected, because of the difference in house prices.
Scottish family housebuilder Mactaggart and Mickel announced it would pay LBTT for first-time buyers purchasing homes up to £300,000 until the end of April in response to the UK Budget.
Director Joanne Casey said: “Although the Scottish budget won’t be revealed until mid-December, we have taken the decision to act immediately.”
The firm said it could save first-time buyers up to £4,600.
Mr Hammond’s measures set out in Wednesday’s budget are aimed at exempting 80 per cent of first-time buyers from stamp duty.
But Ms Sturgeon said 65 per cent of first-time buyers in Scotland are already exempt from LBTT, while 80 per cent already pay nothing or less than £600.
The First Minister told MSPs: “As we finalise our Budget over the next couple of weeks, we will consider whether it is appropriate to give any further assistance to first-time buyers.
“In that respect, two points will be very much part of our consideration. First, house prices in Scotland are lower than those in the rest of the UK. For example, a house that costs £300,000 in the rest of the UK would cost around £175,000 in Scotland.”
The Scottish Government will also be taking into account the warning from the Office for Budget Responsibility yesterday that the policy announced by the Chancellor will “push up house prices” and result in first-time buyers paying more for their houses, Ms Sturgeon added.
“Even with the voodoo economics that we get from the Tories, I do not think that makes much sense,” she said.
The Scottish Government has previously lowered the threshold for paying LBTT in response to measures unveiled by former Chancellor George Osborne in a previous Budget to stave off the prospect of more lucrative terms south of the Border.
Greens co-leader Patrick Harvie last night slammed the tax break unveiled by Mr Hammond. He called on Ms Sturgeon to “refuse to follow a foolish decision by a UK government”.
Mr Hammond yesterday rejected claims that his measure on stamp duty will raise house prices and said abolishing the fee for first-time buyers would create an incentive to save a deposit.
“Hopefully by abolishing stamp duty, which will save the average first-time buyer about £1,700, that will be a help and an incentive to focus on getting the deposit together, getting the money together to get on the housing ladder and we hope that many more young people will be able to get on the housing ladder,” Mr Hammond told BBC Breakfast.
“The important thing is that over the next five years, over the life of this parliament, a million first-time buyers will make an average saving of just under £1,700 when they buy their first home. I think that’s a good news story.”
LBTT was introduced in 2015, but has proven controversial with industry concerns that sales of more expensive homes have suffered.
A report by RICS Scotland earlier this month found concerns among surveyors the tax was “prohibitively high” and “having an adverse effect”.