Following announcements in this year’s Government Budget review, Stamp Duty Land Tax has been abolished for first-time buyers for property purchases up to the value of £300,000. For first-time buyers purchasing properties over £300,000 and under £500,000, normal rate Stamp Duty (5%) will be paid on the additional amount over £300,000. Property purchases over the value of £500,000 are not eligible and normal rate stamp duty will be paid in exactly the same way as it would if a home had been brought before.
The table below demonstrates the new rate of stamp duty that will be paid on first-time purchases:
|Purchase Price||Stamp Duty Paid|
|£300,001 - £500,000||£0 on the amount up to £300,000, 5% on the amount over £300,000 and below £500,000|
|Over £500,000 (but under £925,000)||
0% of the first £125,000
2% on £125,001-£250,000
5% on £250,001-£925,000
It is anticipated that 95% of first-time buyers who pay stamp duty will benefit from these latest changes and will mean that 80% of those buying their first home will no longer pay any stamp duty.
As well as the changes to stamp duty for first-time buyers, the Budget also allocated wider support over the coming five years in order to help build 300,000 net new homes a year in order to further support the property market.
£0 stamp duty paid on the first £300,000
5% stamp duty paid on the additional £75,000
Total stamp duty to be paid = £3,750
Saving compared to previous stamp duty rules = £5,000
Those who have already purchased their first home or who meet any of the below criteria are not eligible to benefit from the changes in stamp duty rates and will therefore continue to pay the same stamp duty as they would have prior to the latest Budget announcements:
If you are a first-time buyer purchasing a property with someone who is not a first-time buyer, you will not benefit from the change in stamp duty regulations.
The changes came into effect immediately, as at 12:01 on 22nd November 2017.
For those first-time buyers that have recently completed their purchase and paid stamp duty according to the regulations that previously applied, there is no rebate available.
Those first-time buyers that are currently going through the process of purchasing their property, but have not yet completed, will benefit from the stamp duty change.
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