Rabbani Gulam is a Chartered Legal Executive
The Chancellor in last months budget delivered an early Christmas present for first time buyers. The result was a new stamp duty relief for first time buyers with immediate effect.
So what is Stamp Duty Land Tax?
This is a type of tax payable by purchasers of land/property on completion. The sums payable is dependent on the value of the transaction.
Who is a ‘First Time Buyer’?
To qualify as a first time buyer for the purposes of stamp duty, you must:
- Be an individual as opposed to a corporate body
- Have never owned a property or held an interest in a property anywhere in the world
- Use the property as your main residence
What are the changes
- No stamp duty will be payable for buying a property up to £300,000
- If you are buying a property between £300,000 to £500,000, no stamp duty will be payable on the first £300,000. Anything between £300,000 and £500,000 stamp duty will be levied at 5%
- Please note if a first time buyer purchases for over £500,000, the relief will not apply. Stamp duty will be charged at the normal rate.
This is illustrated in the table below:
|Property Value||New First Time Buyer Rate (%)||The Standard Rate (%)|
|£125k and below||0||0|
|Above £125k – £250k||0||2|
|Above £250k – £300k||0||5|
|Above £300k – £500k||5||5|
|Above £500k – £925k||5||5|
Some leading experts envisage that changes will increase house prices and the real winners of the budget are in fact the sellers. On the whole, the news has been warmly received by first time buyers as it will alleviate some of the costs involved in buying their first home. It is estimated by industry figures that 80% of all first time buyers will not have to pay any stamp duty at all.