In today’s autumn budget, Chancellor Philip Hammond has announced a huge benefit for first-time buyers, having removed and reduced stamp duty land tax (SDLT), with immediate effect.
Announced today, this is likely to mean that 80% of first-time buyers won’t pay SDLT at all, with 95% seeing it reduced in some way, providing a maximum benefit of £5,000. This is a result of Mr Hammond’s “plan to deliver on the pledge we have made to the next generation, that home ownership will become a reality.”
Currently, anyone looking to get onto the housing ladder will have to pay SDLT on any residential property over £125,000, which are few and far between with today’s house prices.
The amount of SDLT paid is a percentage of the property value, currently set as follows:
<£125,000 = 0%
£125,000 – £250,000 = 2%
£250,000 – £500,000 = 5%
Following the budget announcement, first-time buyers paying £300,000 or less for a property will not pay any SDLT, those paying between £300,000 – £500,000 will pay 5% on the amount of the purchase price in excess of £300,000, a reduction of £5,000 compared to the amount of SDLT they would have previously paid.
To specify, a first-time buyer is an individual who has never owned an interest in a residential property before (which includes inheritance) and plans to occupy the property as their main residence. Unfortunately, first-time buyers who are purchasing with another, who has previously owned property, will not be able to benefit.
The new legislation will apply for transactions with an effective date (usually completion date) from 22nd November 2017, if you have already exchanged, we recommend you speak with your solicitors to confirm whether you can take advantage of today’s announcement, but the information in bold was taken directly from the GOV website so does imply that you could be in line to benefit.
Whilst the deposit will remain the biggest barrier to home ownership, this announcement will be seen as a benefit for many and an early Christmas present for those already in the process of purchasing their first home.
For full details, please visit the GOV website here, alternatively please contact your solicitor or call the HMRC SDLT Helpline on 0300 200 3510.