Stamp Duty for First Time Buyers - 23/11/17
In his autumn 2017 Budget, Chancellor Philip Hammond announced that stamp duty on properties worth up to £300,000 would be abolished for first-time buyers. It is expected that this will save the average person purchasing their first home an average of £1,700.
What is Stamp Duty?
Stamp Duty Land Tax, to give it its full name, is a charge made when you buy a residential property in England or Northern Ireland worth more than £125,000. This applies whether it’s a freehold, leasehold or part of a shared ownership scheme.
There’s a sliding scale of rates, depending on how much the property costs. Here are the current rates for non-first-time buyers:
- Up to £125,000 – Nothing
- On the portion between £125,001 and £250,000 – 2%
- On the portion between £250,001 and £925,000 – 5%
- On the portion between £925,001 and £1.5 million – 10%
- The portion above £1.5 million – 12%
Stamp duty must be paid within 30 days of completion and will normally be dealt with by your conveyancer.
How Much Stamp Duty Will First Time Buyers Pay?
From the 22nd November 2017, the date of the Budget, first-time buyers can claim relief from the fee if the property they buy is worth up to £300,000. In addition, to help those who buy in more expensive areas such as London, they’ll pay nothing for the first £300,000 and just 5% on the portion between £300,001 to £500,000.
If the house or flat is worth more than half a million pounds, you’ll pay the same as everyone else.
Am I Eligible for the Stamp Duty Relief?
As long as you, and anyone else you are buying the house or flat with, have never bought a property before, you will not have to pay stamp duty.
Who Will Benefit?
It is thought that 95% of first-time buyers from now on will save money thanks to the new rule, with 80% of all debutant purchasers paying no stamp duty at all.
If you are selling your home, it could mean that there are more potential buyers out there, as those currently renting might be encouraged to take the plunge. In addition, parents of potential first-time buyers could finally reclaim the spare room they would dearly love to have access to, now their kids are able to leave home.
It could also see an upturn in business for tradespeople. With an average saving nearing £2,000 and a maximum of £5,000, it means that first-time buyers may not have to wait to make improvements to their new abodes.
New bathrooms, kitchens, electrics, windows, doors or a host of other improvements could be on the cards immediately on moving in, rather than being postponed until the new owners have had chance to save up.
How Can I Find Out More?
If you want more information on the changes to stamp duty and how they affect you, just drop us a line. As well as selling homes, we offer a range of services to make your move as smooth as possible. We can help with surveys, mortgages, conveyancing and more. Visit the Contact Us page to ask us anything that’s on your mind.