The government today announced a relief from stamp duty land transaction tax (SDLT), commonly known as stamp duty, for the benefit of first time buyers and to reduce their upfront costs.
This is a recycling of a measure used before. The last such measure was ended in March 2012 as the government said it had been ineffective in increasing the number of first time buyers entering the market. The concession however was miserly compared with today’s concession. It still however contributed to an artificial spike in transactions when it ended.
The new concession applies to:
If the conditions are met then no SDLT is payable on a purchase price of £300,000 or less, and only tax at 5% is payable on the part of the purchase price paid in excess of £300,000.
Some key questions answered:
What is a first time buyer?
A person who has not acquired a freehold or leasehold interest in residential property in the UK (except a lease with less than 21 years to run) or an equivalent interest anywhere in the world.
When is the relief available?
The relief is available for transactions with an effective date (usually the completion date) on or after 22 November 2017. No end date has been mentioned in the brief guidance provided today.
I want to buy a house with my partner but one of us has previously owned a residential property. Can we claim the relief?
No. All of the buyers, when there is more than one, must be first time buyers.
I previously bought a house jointly with my spouse/partner. The partnership has broken up so can I be treated as a first time buyer?
No. Where the individual has previously acquired an interest in a residential property as a joint tenant or a tenant in common the individual is not classed as a first time buyer.
Is the relief available on transfers of interests in a home between partners?
Such a transfer normally requires a transfer from the existing owner to him/herself and the partner. Even if the partner is a first-time buyer the existing owner is not so the relief is not available.
Can I get relief if I have previously owned an inherited property?
No. In this case a person will previously have acquired a major interest in a residential property.
Can I claim the relief if I’m buying on behalf of my parents?
No. Relief is not available unless the first time buyer(s) are buying, for themselves, a property that they intend to use as their only or main residence.
Is there an age limit on claiming the relief?
No. First time buyers can be any age.
Is there a price limit on claiming the relief?
Yes, the sum for the whole of the purchase must not exceed £500,000.
Please note the information is as available at the time of posting. This article is not intended as a substitute for legal advice. Always consult your conveyancer.