No more SDLT for First Time Buyers
Most people will have heard the good news in the budget announcement yesterday that stamp duty will no longer be payable for most first time buyers. This means a potential saving of up to £5,000 on the costs of buying a property, but what are the rules?
The draft legislation released so far sets out the following conditions which have to be met for the stamp duty relief to apply:
- The property being purchased is a single residential property
- The purchase price is less than £500,000
- The purchaser (or if more than one, each of the purchasers) are first time buyers and intend to occupy the property as their main home
- The purchase is not linked to any other transaction (unless additional purchase of garden land/parking space/garage that is used for the benefit of the property)
If the conditions above are met, stamp duty is payable as below:
|Purchase Price||Stamp Duty|
|£0 - £300,000||No stamp duty is payable|
|£300,000 - £500,000||5%|
For example the tax due on a property purchase by a first time buyer for £450,000 would be £7,500, calculated as follows:
On the first £300,000 of the purchase price 0% = £0
On the remaining £150,000 5% = £7,500
You will not qualify as a first time buyer if you have ever previously owned (or part owned) a residential property anywhere in the world. This includes if you inherited a property which has since been sold.
The relief only apply to purchases that completed on or after 22 November 2017, so unfortunately if you completed before this date you will not be entitled to a refund.
There will be some unusual circumstances where clarification may need to be sought from HMRC so if you are unsure of your position and hope to complete your purchase soon then please consult your solicitor.
For detailed guidance notes please see the Government's website page.