The Conservatives in the UK will abolish the property tax: who will benefit.

According to The Sun: As part of an initiative to make housing more affordable, Kemi Badenoch has promised to abolish the stamp duty for primary residential properties if the Conservative Party wins the next elections.

The stamp duty land tax (SDLT) is a one-time payment that is made when purchasing property valued above a certain threshold.

The amounts of the tax depend on whether the buyer is a first-time buyer or moving to a new home.

Currently, first-time buyers pay tax on properties worth over £300,000, while buyers of second homes pay tax on properties worth over £150,000.

The tax has a progressive scale: the percentage to be paid depends on the value of the property, with higher rates applied when purchasing a second home.

Kemi Badenoch's Plans

During her speech at the Conservative Party conference in Manchester, Kemi Badenoch announced plans to abolish the stamp duty for primary residential properties.

She stated that this policy would help millions of people achieve their dream of homeownership and significantly reduce the financial burden when moving.

Badenoch believes that this change would 'open a fairer and more ambitious society' and make moving less of a burden on the budget.

So, how much can one save by abolishing the stamp duty? Details follow.

Sara Coles, head of personal finance at Hargreaves Lansdown, emphasized: 'If this happens, the wealthier buyers purchasing expensive properties will save the most.'

'But this does not mean that ordinary buyers will not have benefits.'

For an average buyer purchasing property worth £270,000, the savings would be £3,500.

Sara also added: 'While this would be a welcome relief in such expensive times, savings could quickly be eaten up by additional costs like mortgage fees, legal expenses, and valuations.'

First-time buyers purchasing property for less than £300,000 will not receive any benefits as they are already exempt from the stamp duty.

Instead, those purchasing more expensive properties will have the largest benefits.

For example, a first-time buyer purchasing a flat for £400,000 will save £5,000, while someone buying for £500,000 will save £10,000.

For wealthy buyers purchasing luxury properties, the savings can be staggering.

For property worth £750,000, the tax will decrease by £27,500, while for a home priced at £1 million, the savings will amount to €43,750.

Coles pointed out that sellers may raise property prices, which could ultimately reduce buyers' savings if the bill is passed.

'But no one will be in any other mood than pleased about the tax decrease,' she added.

What is stamp duty?

The stamp duty land tax (SDLT) is a one-time payment that a buyer must make when purchasing property or land valued above a certain amount.

You pay the tax when:

• You purchase property under ownership
• You buy a new or old lease
• You purchase property through a shared ownership scheme
• A land plot is transferred to you or property in exchange for a fee, such as in a mortgage or purchase of a share in a house

The tax rate depends on the value and type of property, as well as specific thresholds.

First-time buyers do not pay stamp duty if the property costs £300,000 or less.

You will also receive a reduction if the purchase price is £500,000 or less, and you will only pay 5% SDLT on the portion from £300,001 to £500,000.

Those who are not first-time buyers pay different rates depending on the price of the new home:

• If the price is up to £125,000 — no stamp duty is charged
• For the next £125,000 (from £125,001 to £250,000) — stamp duty is charged at a rate of 2%
• For the next £675,000 (from £250,001 to £925,000) — stamp duty is charged at a rate of 5%
• For the next £575,000 (from £925,001 to £1.5 million) — the tax rate is 10%
• For any remainder exceeding £1.5 million — the tax rate is 12%

For example, if you buy a house for £295,000, you will pay £4,750 in stamp duty.

Typically, you must pay an additional 5% on top of SDLT rates if you purchase a new residential property and own more than one property.

How to determine how much stamp duty I need to pay?

You can easily find out the amount of stamp duty you need to pay by using free online calculators.

For example, you can use the Money Helper tool by visiting moneyhelper.org.uk/en/homes/buying-a-home/stamp-duty-calculator.

Alternatively, the website stampdutycalculator.org.uk can help you find out how much stamp duty you should pay for a property transaction.

You will need to select whether you are a first-time buyer, moving to a new home, or buying additional property.

Then enter the purchase price, and the tool will provide you with precise figures.

How to get the best mortgage deal

If you are looking for a traditional type of mortgage, obtaining better rates entirely depends on what is currently available.

There are several ways to find a better deal.

Usually, the bigger your deposit, the lower the rate.

If you are refinancing, and your loan-to-value ratio (LTV) has changed, you might secure better rates.

Your LTV will decrease if your mortgage balance is lower and/or if your home's value is higher.

Improving your credit history or an increase in salary can also help you get better terms.

If your fixed term is about to end, consider new offers right now.

Sometimes you can reserve current deals a few months before the end of your current deal.

Typically, exiting a fixed deal early comes with a penalty for early repayment, so this is extra cost to avoid.

However, depending on costs and potential savings, switching to another deal can be worthwhile — but first, compare all the costs.

To find the best deal, use mortgage comparison tools to view available offers.

You can also consult a mortgage broker who can compare a wider range of deals.

Some brokers may charge additional fees but there are those who offer free consultations and get paid only by the lender.

Do not forget to also consider mortgage fees; some offers may be fee-free.

You can add these fees to the mortgage amount but be cautious as interest will be charged on this amount, ultimately making it more expensive in the long run.

Use a mortgage calculator to find out how much you can expect.

Remember, you need to meet strict lender criteria, which include affordability checks and reviewing credit histories.

You may also need to provide documents such as utility bills, bank statements, and income verification.

Changes in tax policy can significantly impact the real estate market. In particular, the abolition of stamp duty could make home ownership more appealing to a younger audience. While this may lead to an increase in property prices, in the current context, it could also serve as an incentive for market growth. Stay tuned for further news updates on this initiative, as it may radically change the approach to home buying in the UK.