Stamp Duty Cuts. What this means for first time buyers.
27th November 2017 by John Munro
As of 22 November 2017, first-time buyers completing the purchase of their first home for the value of £300,000 or less will pay no Stamp Duty Land Tax (SDLT).
Where the purchase price is over £300,000 but does not exceed £500,000 they will pay 5% on the amount above £300,000. The relief is not available where the purchase price is over £500,000.
For example, the tax due on the purchase of a dwelling by a first-time buyer for £450,000 would be £7,500, calculated as follows:
|Property Value||Rate||SDLT payable|
|On the first £300,000 of the purchase price||0%||£0|
|On the remaining £150,000||5%||£7,500|
It is estimated that as a result of the change, 95% of first-time buyers will benefit from a reduced SDLT bill.
Who can benefit from the relief?
In order to qualify as a first-time buyer, a purchaser must not, either alone or with others, have previously acquired a freehold or leasehold interest in either a dwelling or land situated anywhere in the world.
If a property is to be purchased by more than one person, all purchasers must satisfy the above criteria in order to benefit from the relief. If one of the purchasers has owned a residential dwelling or land before, either alone or with others, the usual SDLT charging rates will apply.
The property must be purchased in the name(s) of the first time buyer(s). The relief does not apply to a company purchasing a property for the first time.
Which properties can benefit from the relief?
The relief will apply to properties purchased in England, Northern Ireland and Wales up until 31st March 2018, but excludes Scotland.
The property must be a single dwelling and the first time buyer(s) must intend to occupy the dwelling as their only or main residence. The relief will therefore not apply to purchases of non-residential property or property of mixed use, for example, the purchase of a commercial shop with a residential flat above.
If you have any further questions please email firstname.lastname@example.org or call 01202 557256 and any of our property department would be happy to help.