Money saving guru Martin Lewis has forced the UK Government to remove its claim over stamp duty savings after he dubbed it “nonsense” and “irresponsible”. The Treasury posted on Twitter that a first-time buyer in London could save thousands thanks to its new growth plan cutting stamp duty which was released on Friday.
The post, which has since been deleted, read: “Thanks to the Growth Plan, a typical first-time buyer in London moving into a representative terraced house will save £11,250 on stamp duty & £1,050 on the household’s energy bills – and if they earn £30,000 almost an additional £400 on tax. This is around £12,700 in total.”
But the Money Saving Expert hit back on Twitter, writing: “This is nonsense. To make that stamp duty saving you’d need to be buying a £500,000+ property. With 10% deposit, cheapest fix mortgage would cost £2,400/mth (£28,000/yr). How can someone on £30k afford that. I am asking treasury to remove.”
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Chief Secretary to the Treasury Chris Philp later appeared on ITV’s Good Morning Britain where host Lewis told him: “Your example is for someone who earns £30,000 a year. Clearly they would not get that mortgage. And clearly on £30,000 a year before tax you cannot pay a mortgage of £28,000 a year. This seems fundamentally irresponsible.”
While Mr Philp told Mr Lewis that he hadn’t seen the posts, he responded: “I imagine, I’m just sort of speculating, when they used the £30,000 to work out the tax saving, they were doing that to illustrate the income tax saving of someone on approximately medium earnings. You are right to point out that someone on that particular level of earnings would be unlikely to be able to get a mortgage to fund a £500,000 house, unless, of course, they were doing so with a partner, but I suspect that’s why they did it.”
Mr Lewis asked Mr Philp if he would speak to colleagues about taking the post down. “Can I ask you to look at those messages," he said. "To have them taken offline in the middle of a cost-of-living crisis, where they give people false hope?”
The government did later delete the tweet. Mr Lewis then tweeted: "Thanks to the Treasury for agreeing to delete. It says: 'While the figures were statistically accurate, we recognise assumptions were made about the typical 1st time buyer profile which weren't reflected. We take responsible messaging v seriously, which is why we've deleted the tweet.'"
Part of the "new growth plan" was to cut stamp duty, with the nil rate band doubling from £125,000 to £250,000. This means 200,000 more people every year will be able to buy a home without paying any stamp duty at all.
Mr Lewis said many fans have asked him if they will still get the new rates if they have exchanged homes but not "completed". In a tweet, he replied: "In general yes, stamp duty is crystallised at completion (though there can be some exceptions - check with your solicitor)."
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