Manchester is the ninth-most active town or city for completions assisted by the Help to Buy scheme, so what does this mean for property tax in the city?
The latest figures from HM Treasury show that, since the launch of the scheme’s equity loan and mortgage guarantee components, Manchester has been among the local authorities with the highest activity levels.
A total of 426 completions have used Help to Buy, including 100 mortgage guarantees and 326 equity loans.
Interestingly, this is substantially more mortgage guarantees than some higher-ranked LAs, such as Milton Keynes (75) and Peterborough (60), although both of those had more equity loans, causing them to rank higher in terms of overall Help to Buy completions.
Property tax implications depend on the value of the property; the average house price for properties bought using Help to Buy stands at £187,800.
This would attract a 1% rate of stamp duty, rising to 3% on a purchase price over £250,000.
More significant for many people might be the risk of having to pay capital gains tax; this usually shouldn’t be a problem on people’s primary residence, which is likely to be the case with most Help to Buy purchases.
However, if you are a local landlord interested in how the proliferation of Help to Buy buyers might make this a good chance to downsize your own property portfolio, it’s worth bearing CGT in mind when you come to sell.