Today the Chancellor of the Exchequor announced in his budget that from 22 November 2017 any first time buyer paying £500,000 or less for a residential property will be able to claim relief from Stamp Duty Land Tax (SDLT)
TELL ME MORE. First time buyers paying £300,000 or less for a single residential property will pay no SDLT. First time buyers paying between £300,000 and £500,000 for a single residential property will only pay SDLT at 5% on the amount in excess of £300,000. If you are a first time buyer purchasing above £500,000 then the normal SDLT rates will apply.
WHEN? This takes effect for transactions which complete on the 22nd November 2017 or later.
WHERE? This measure applies to England, Northern Ireland and Wales. It only applies in Wales up to 01 April 2018. It does not apply to Scotland.
WHY? The Government have introduced this measure to reduce the up front costs for first time buyers and to continue to show support to home ownership and first time buyers
WHO IS A FIRST TIME BUYER? A First Time Buyer is an individual or individuals who have never owned an interest in a residential property anywhere in the world and who intend to occupy the property they are buying as their only or main dwelling.
MY PARTNER & I ARE BUYING TOGETHER FOR THE FIRST TIME, ARE WE FIRST TIME BUYERS? The answer to that is if either of you have owned an interest in a property previously, maybe with another partner, then you do not qualify as First Time Buyers.
I AM BUYING MY FIRST HOME AT £220,000, HOW MUCH WILL THIS SAVE ME? Stamp duty at the previous rate was 2% from £125,000 to £250,000 and you would have had to pay £1900 under that scheme so therefore you will make a saving of £1900.
HOW DO I CLAIM THE RELIEF? Your Solicitor or Conveyancer will claim the relief on your behalf when completing your SDLT return.
Only time will tell if this will have an impact on the housing market. The government expect to see a small rise in house prices for the first year after implemetation. The measure will benefit first time buyers of residential properties where the purchase price does not exceed £500,000 saving purchasers up to £5000 and reducing the upfront cost of buying a home for first time buyers. The treasury estimates that 80% of first time buyers will be affected by the change.