22nd November 2017
Stamp Duty Land Tax for First Time Buyers and other property taxes
It had been rumoured that Chancellor Phillip Hammond would re-introduce a Stamp Duty Land Tax exemption for first time buyers (something which has existed in the past)
This report proved correct on the 22nd November with Mr Hammond raising the price at which residential property can be bought without incurring Stamp Duty Land Tax. And it is the intention of the Chancellor that this will be in place for the next five years.
So long as the property being bought is for £300,000 or less, first time buyers will now be able to buy their home Stamp Duty Land Tax free. This means a maximum of £5,000 “back into your pocket” and the government estimates that 80% of first time buyers will incur no Stamp Duty Land Tax at all.
It is worth noting that the existing rate of 5% Stamp Duty Land Tax will apply to the cost between £300,000 and £500,000.
Unfortunately, those buying properties over £500,000 for the first time will incur Stamp Duty Land Tax on the whole amount at the usual sliding scale for main residential dwellings and therefore not benefit from this Stamp Duty Land Tax change. See below.
|Property or lease price or transfer value||SDLT rate|
|Up to £125,000||Zero|
|The next £125,000 (the portion from £125,001 to £250,000)||2%|
|The next £675,000 (the portion from £250,001 to £925,000)||5%|
|The next £575,000 (the portion from £925,001 to £1.5 million)||10%|
|The remaining amount (the portion above £1.5 million)||12%|
In addition, the additional Stamp Duty Land tax surcharge will still apply to those individuals who are purchasing second homes.
Another way the Treasury is hoping to help young people trying to get onto the housing market is through investing a further £10 billion into the Help to Buy Equity Loan scheme whereby you put in 5% deposit, the Government lend you a certain percentage (up to 20% or 40% if you are buying in London) and then you make up the additional sum through mortgage funding.
Buss Murton’s Property Team are experienced in both Stamp Duty Land Tax law and Help to Buy matters and would be pleased to speak to you about your purchase.