It’s no secret that the rising of property prices has become a brutal political concern for many governments. In the UK house prices have risen 70% over the last decade making it near impossible for first-time buyers to get onto the property ladder. So, with the immediate changes to stamp dutyannounced in the last budget, the government have said this should help those trying to get onto the housing ladder, easing the struggles to gather deposit and conveyancing fees.
How is the Stamp Duty changing?
On the 22ndNovember 2017, at 12.01am Britain’s Chancellor of the Exchequer Phillip Hammond announced that immediate abolishment of the stamp duty for first-time buyers. This stamp duty change will only apply to first-time buyers within England, Wales and Northern Ireland – no changes have been announced for stamp duty in Scotland.
What is stamp duty?
Some of you may be wondering what stamp duty is and how does this save me money when purchasing my first home? Stamp duty is a large amount of tax that anyone purchasing a property or land costing more than a set amount must pay. The rate at which you’ll pay the tax varies on the property price.
For example, prior to the 22ndNovember 2017 if you were a first-time buyer searching the market to purchase a 2% duty would have been applied to every pound for a property priced at £125,000 and above. So, if you were to purchase a property of £200,000 this would have involved an additional duty bill of £1,500.
With the stamp duty now abolished if a property costs more than £125,000 and up to £500,000 you will save money as a first-time buyer.
I’m a first-time buyer, what are the stamp duty rates?
If you are living within England, Wales and Northern Ireland, the change to stamp duty rate will apply on properties costing up to £500,000.
You get a deduction (relief) that means you pay less or no tax if:
- Your property purchase date falls on or after 22 November 2017
- the purchase price is £500,000 or less
- you, and anyone else you’re buying with, are first-time buyers
First-time buyers should note by purchasing a property from £500,000 above you will not benefit from any stamp duty changes and will be purchasing under the usualstamp duty scheme, which also applies to the non-first-time buyers.
Am I classed as a first-time buyer?
A first-time buyer is someone who has never owned a freehold or leasehold property and at the time of purchasing this it is their first and only residence. This same method is applied if the purchase was made jointly, all purchasers would need to be first-time buyers to qualify for any benefits on duty costs.