By Richard Wisnia, Solicitor & Head of New Build Conveyancing
You may have heard the news from yesterday’s Autumn Budget but, in case you missed it, Chancellor Philip Hammond has announced a new Stamp Duty tax relief for first time buyers.
What did he say?
If you are a first time buyer (you’ll see more on what that means later in the blog) this tax relief will have the benefit of cutting the cost of buying your first home by anything up to £5,000!
This will no doubt make a huge difference to potential homebuyers across England, Wales and Northern Ireland, where the cost of Stamp Duty can be a barrier for many to get onto the housing ladder.
The new Stamp Duty relief will not apply in Scotland, where a different set of rules apply.
Who counts as a first time buyer?
For the purposes of Stamp Duty, the term “first time buyer” has a specific definition, and you will need to meet specific criteria to qualify for the relief. According to the information published yesterday by H M Treasury, a first time buyer is:
- an individual or individuals (so not a corporate body) who:
- have never owned an interest in a residential property in the United Kingdom or anywhere else in the world; and
- intend to occupy the property being purchased as their main residence.
How do the new rules work?
The Stamp Duty relief applies to genuine first time buyers in the following circumstances:
- On the purchase of a property up to a price of £300,000, there will be no Stamp Duty payable;
- On the purchase of a property with a price of between £300,000 and £500,000, there will be no Stamp Duty payable up to £300,000, and for the “slice” of the purchase price over £300,000, the Stamp Duty rate will be 5%.
It is important to note that if you are buying a property with a purchase price higher than £500,000, no Stamp Duty relief is available at all. In those circumstances, Stamp Duty will be payable on the full purchase price.
When does the relief apply?
The first time buyer relief has been introduced with immediate effect. This means that if you are a genuine first time buyer, so long as your purchase has a legal completion date of 22nd November 2017 or later you will be able to benefit from the relief.
You should get in touch with the Conveyancer dealing with your purchase (if you haven’t already done so) to discuss further.