Prior to the Budget first-time buyers paid Stamp Duty on purchases above £125,000. In today’s Budget the Chancellor announced that Stamp Duty has been abolished immediately for first-time buyers buying a home of up to £300,000.
The change means that for properties costing up to £500,000, no Stamp Duty will be paid on the first £300,000. Stamp duty will then be charged at a rate of 5% on the amount from £300,00 to £500,000.
The change will apply in England and Wales, and in Northern Ireland up until the end of March 2018.
The table below illustrates the changes.
What is Stamp Duty?
Stamp Duty is a lump-sum tax that anyone buying a property or land costing more than a set amount has to pay. The amount of tax you will have to pay varies based on the property price.
Do I qualify as a first-time buyer?
A first-time buyer is defined as someone who has never owned freehold or leasehold property before and who is purchasing their only or main residence. This includes ownership of a property anywhere in the world.
So if you have sold up and rented for a while, you do not qualify.
You also won’t qualify for the relief if you’re buying to let – even if it’s your first purchase. The property you’re buying needs to be used as your main residence.
In respect of a joint purchase, all purchasers would need to be first-time buyers to qualify for the relief.
Please contact our Property Department for further information.