First Time Buyers and Stamp Duty

The budget on 22 November 2017 provided greatly needed assistance to first time buyers in the form of a relief on stamp duty.

How does the relief work and what are the rules?

The calculation is fairly simple:

First Time Buyers purchasing a property up to £300,000 will be exempt from stamp duty.

First Time Buyers purchasing at a price between £300,000 & £500,000 will be exempt from paying stamp duty on the first £300,000 and will pay 5% on the amount between £300,000 & £500,000.

First Time Buyers buying a property over £500,000 cannot apply any relief for stamp duty under the new rules.

Purchase Price (£)	Normal Rates of Stamp Duty	First Time Buyer Stamp Duty Rates
0-125,000	£0	£0
125,001 – 250,000	2% on amount between £125,001.00 & £250,000	£0
250,001 – 500,000	2% on the £125,000 in the bracket above (£2500) plus 5% on the amount between £250,001.00 & £500,000	£0 on the first £300,000 and then 5% on the amount between £300,001 and £500,000

 

No relief is available for properties purchased over £500,000 and therefore normal stamp duty rules apply.

The rules are relatively straightforward:

1. You cannot own or have owned another property anywhere in the world.

2. If you are buying the property with another person they cannot have owned a property or currently own a property anywhere in the world.

3. The Property value must be £500,000 or lower.

4. If the property you are purchasing is shared ownership you can only apply for this relief if you make the market value election on your first transaction. (You cannot claim the relief if you have already bought your first share and are staircase).

5. There is no age limit! As long as you fit the requirements above then the relief will apply to you.

6. This cannot be backdated. If you bought your property before the budget date (22 November 2017) then you do not qualify under the new rules.

Will this make owning a home easier for First Time Buyers? This measure, if used alongside, say the Help to Buy ISA scheme or where advantage is taken of some of the new higher loan to value lending, could provide welcome assistance to first time buyers.

Here at Chadwick Lawrence our experienced conveyancing team are here for you if you are Buying, Selling or Remortgaging a property. If you do require our expert services please contact us on 0800 015 0340 or email to home@chadlaw.co.uk