Stamp Duty Stamped Out For First Time Buyers!
- AuthorEve Wilderspin
What Is Stamp Duty?
SDLT (Stamp Duty Land Tax) is a tax charged by the government when a property is over a certain price band. The form itself is submitted in every single conveyancing agreement apart from those below £40,000 and is used by HMRC to check the details of the entire transaction so it is imperative that the information given is correct. It must be submitted within 30 days of completion and failure to do so may result in a £100 penalty.
What Has Changed?
As of 22nd November 2017, it was announced that the stamp duty thresholds had changed again but this time in favour of first time buyers.
Those paying £300,000 or less are no longer eligible for dreaded SDLT fees. This means that the housing market has opened up considerably and those purchasing their first home can look further afield and broaden their budget perhaps!
The old rates meant that any property above £125,000 was hit by SDLT and this was charged at 2% and above depending on the scale so it really is a fantastic step for would-be homeowners.
For properties between £300,000 and £500,000, stamp duty has been significantly reduced so this means that they now pay 5% of the purchase price beyond this, which is a saving of around £5,000 compared to previous scales!
Any property above £500,000 is subject to normal SDLT rates and will not benefit from first time buyer relief.
Unfortunately, any client that has been charged stamp duty prior to the announcement will not be eligible for a refund and will have been subject to the going rates at the time.
As this was a hectic time for all conveyancers, it meant that some clients were refunded on completion and had a nice surprise to welcome them to their new home.
All clients will now be asked to complete a first time buyer SDLT declaration that states that they are a first time buyer. Don’t be caught out however – if you are purchasing in joint names, both purchasers MUST be first time buyers in order to benefit from the relief. If you have been named on a mortgage previously, this will not apply to you even if your partner hasn’t.
It is a positive step by the government as it allows more and more people to get a foot on the housing ladder and means that peoples’ dream homes are actually in reach rather than remaining just a dream!
Stamp Duty on second homes still applies and is as it was before the budget announcement, but it is refreshing to see that times are changing and allowing the market to flourish rather than slump as they did once before.
If you have any queries with regards to Stamp Duty, please contact our Conveyancing Team who will be happy to assist.