SDTL First Time Buyerâ€™s Relief
Posted on 24 November 2017 by Laura Godfrey
It was announced as part of the Autumn 2017 Budget, that as of 22 November 2017, first time buyers paying £300,000 or less for a residential property will pay no Stamp Duty Land Tax (SDLT).
First time buyers paying between £300,000 and £500,000 will pay SDLT at 5% on the amount of the purchase price in excess of £300,000 but those purchasing property for more than £500,000 will not be entitled to any relief and will pay SDLT at the normal rates.
For non first time buyers, SDLT is paid on all residential properties worth more than £125,000. The duty is levied at a staggered rate above that threshold increasing in line with the value of the property being bought.
The new relief was announced as part of a range of measures designed to address the UK’s housing crisis and to support home ownership and first-time buyers with the intention of reducing the upfront costs for first time buyers.
A first time buyer is defined as “an individual or individuals who have never owned an interest in a residential property in the United Kingdom or anywhere else in the world and who intend to occupy the property as their main residence.”
It is important to note that if two individuals are purchasing a property and one of them has previously owned an interest in a property then the relief cannot be claimed.
The relief must be claimed in an SDLT return so a return will still need to be prepared by a conveyancer and submitted to HMRC on completion; albeit a reduced amount of SDLT or no SDLT will be paid.
The change will apply in England and Northern Ireland, and in Wales up until the end of March, but not in Scotland as they have an independent system of land tax.
There are concerns that by abolishing SDLT for first time buyers, house prices could be pushed up which would benefit existing homeowners rather than first time buyers. The Office for Budget Responsibility has warned that they expect house prices to rise which would mean that first time buyers would need to provide more of a deposit to be able to get on to the property ladder.
Posted in: Buying & Selling Your Home