On 22 November 2017 the Government delivered a budget aimed at “reviving the home-owning dream in Britain."
One of its key announcements was to abolish stamp duty land tax for first-time buyers on house purchases of up to £300,000.
Those buying properties up to £500,000 will pay no stamp duty on the first £300,000 and 5% from £300,000-£500,000. This means a maximum saving of £5,000.
The Chancellor Philip Hammond reported that 95% of first‑time buyers will benefit from the reduced rates, and 80% will now pay no tax at all.
The rates can be compared as follows:
Current standard rates
Rate for first time buyers
Up to £125,000
Over £125,000 and up to £250,000
Over £250,000 and up to £300,000
Over £300,000 and up to £500,000
How will the changes affect me?
Most first-time buyers will no longer need to budget for stamp duty when saving for their first home. In the first half of 2017 the average cost of a house for first time buyers in the UK was £210,000. Ordinarily this purchase would levy a tax of £1,700. Those would qualify will now pay nothing at all.
The changes took effect in England and Northern Ireland on 22 November 2017. Any purchases which completed on or after this date will qualify for the relief. First-time buyers in Wales will have to wait until 1 April 2018. Scotland has its own taxation system.
What do I need to know?
A first-time buyer is anyone who hasn't owned a property before anywhere in the world, whether bought or inherited. If two people are buying a property together, both must be buying for the first time to benefit from the reduced rates.
Further, the relief can only be claimed by first-time buyers who intend who to occupy the property as their only or main residence. Anyone buying their first property as a buy-to-let, won’t qualify for the relief.
If you have any questions, please do not hesitate to contact our residential property teams at York, Selby and Malton.