Are you a first time buyer? The changes to Stamp Duty Land Tax announced in the autumn Budget means that an estimated 80 per cent of first time buyers won’t pay stamp duty.
Buying a house often has many hidden costs that may not necessarily come to light until well into the process. However, changes to stamp duty announced in the recent autumn Budget will come as a welcome relief to people trying to get on to the property ladder.
First time buyers can now claim relief on residential properties purchased on or after 22 November 2017, where the purchase price is no more than £500,000. First time buyers pay no stamp duty if their property is worth up to £300,000 and if the property is worth up to £500,000, stamp duty is waived on the first £300,000, with five per cent paid on the remainder.
According to the HM Treasury, this means that they anticipate 80 per cent of first time buyers will not pay stamp duty.
A few guidelines
Of course, there are things to keep in mind when purchasing a property as a first time buyer. Be aware that the relief only applies when each purchaser is a first time buyer, so if you are purchasing your house jointly, you must both be buying a property for the first time.
And what does it mean to be a first time buyer? A first time buyer, in this case, is defined as having no major interest in a dwelling anywhere else in the world.
Secondly, the property in question must be used as the main residence. That doesn’t necessarily mean you have to move in straight away after completion, but it does mean that there should be a clear intention of using it as a main residence.
The relief is only for people who have completed their house purchases on or after the 22 November 2017, and is for individuals only, rather than companies.
The relief also only applies if the purchase is not linked to another and if the property has more than one dwelling, then it may not be available.
If you purchase your house after the 22 November and forget to claim the relief, you can claim a refund any time up to 13 months after completion.
This is a great initiative to assist first time buyers to get on to the property ladder. If you are in the process of buying a home or if you think you are eligible for the relief, don’t forget to discuss it with your conveyancer before they submit your tax return.
For more information or advice on changes to stamp duty contact Coodes Solicitors on 01726 874700.