Stamp Duty abolished for First Time Buyers up to £300,000

 

At last, good news for those wanting to take their first steps on the property ladder.

 

With the government’s decision to abolish stamp duty for first time buyers on properties up to £300,000 from 22 November 2017, this could represent a saving on your total cost of moving of up to £5,000.

 

So now is the perfect time to start looking for that dream home.  We all know that buying a house is not just about the purchase price, there are many other costs to take into consideration.  This saving could go towards your solicitor’s fees and moving costs or enable you to buy furniture you thought you couldn’t afford.  Maybe that house that was just out of your reach is now affordable.

 

Not only is this great news for first time buyers but also for sellers.  This new incentive means more people will be looking to move and increase buoyancy in the market, so why not contact us for a valuation.

 

Now for the nitty gritty (the small print).

 

Definition of a first time buyer:  “A purchaser must not, either alone or with others, have previously acquired a major interest in a dwelling or an equivalent interest in land situated anywhere in the world.”

 

The purchase must be a single dwelling and can be freehold or leasehold as long as there are more than 21 years left on the lease.  For properties with a lease with less than 21 years to run, the relief does not apply.

 

The stamp duty relief is only available if the purchase price of your house does not exceed £500,000.  For purchases over £300,000 and below £500,000 you will still need to pay stamp duty on any amount over £300,000, which is currently set at 5%.  For example the tax due on the purchase of a dwelling for £450,000 would be £7,500, calculated as follows:

 

Purchase price

Rate

Amount

On the first £300,000

0%

£0

On the remaining £150,000

5%

£7,500

 

The purchaser or purchasers must be first time buyers who are intending to occupy the dwelling as a main residence.  If the purchaser is a company then there is no relief.

 

If you are purchasing a dwelling as a couple and one of you has owned a property before, you will not be counted as first time buyers.

 

If you have inherited a dwelling, resulting in you acquiring a freehold or leasehold interest, and are using the sale proceeds to purchase a dwelling, you cannot claim first time buyer’s relief.

 

If you are first time buyers and are buying a dwelling jointly you can only claim relief if all the purchasers are using the property as their only or main residence.

 

If your parents bought a house for you as a student you can only claim relief if your parents owned the house in their names and you have never owned a dwelling.

And finally …

 

The relief has to be claimed.  This is done by entering relief code 32 at question 1.9 on the land transaction return.

 

In order to work out how much tax you have to pay you can find a calculator on the HMRC website at:  https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax