By Jonathan Potter
The announcement of the Budget by the Chancellor of the Exchequer Philip Hammond has brought good news for first-time buyers with the stamp duty land tax exemption.
Here we set out the key points for first-time buyers to be aware of:
The relief will only apply to first-time buyers. If you or anyone buying with you has previously owned or currently owns an interest in any property in the world then you will not qualify.
You must intend to move into the property as your main or only residence.
The property must be a residential property and cannot be a commercial property or mixed use property.
You will not be liable to pay any stamp duty land tax for such a property for purchases up to £300,000.
If the property you are buying is between £300,000 and £500,000, you will not be liable to pay any tax on the amount up to £300,000 but will then pay tax at a rate of 5% on any amount between £300,000 and the price being paid (up to £500,000.00).
For any purchase where the price exceeds £500,000, you will not qualify for the relief and will be liable to pay stamp duty land tax at normal rates on the whole price.
For shared ownership properties, the relief will not be available for purchases of an existing property even if you would otherwise qualify to not pay stamp duty land tax
For a new shared ownership property, if you opt to pay stamp duty land tax on the full market value of the property and the value is below £500,000 and you otherwise qualified for the relief, you will either not have to pay tax on the price at all or would pay tax at a reduced level as above in Point 5. You may however still be liable to pay tax on the rent under the lease though depending on the level.
The above is guidance on the tax changes but is not advice on your specific circumstances. At TWM Solicitors, our Residential Property team can all provide you with advice on your particular purchase. We would be pleased to assist and discuss your requirements without obligation.
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