During this year’s Autumn Budget, it has been announced that from 22 November, 2017 Stamp Duty Land Tax (SDLT) would not be paid on first-time buyers’ purchases of up to £300,000.00. The announcement from Philip Hammond came amid wide-ranging measures aimed at boosting house building in the UK, putting the UK’s housing shortage at the heart of the current government’s budget.
Before today’s announcement, first-time buyers paid SDLT on property with a purchase price of £125,000.00 or higher. As of today, SDLT will be abolished for first-time purchases up to £300,000.00, having the knock on effect that first-time buyers will pay less on purchases between £300,000.00 and £500,000.00.
Please see a breakdown below showing SDLT for a first-time buyer both before and after today’s Budget:
|Before Budget||22 November Onwards|
|Above £500,000.00||SDLT due is unchanged on purchases above £500,000.00|
In order to be eligible for this new relief, buyers will have to meet the provided definition of a first-time buyer. HM Treasury have confirmed that a first-time buyer will be someone “who has never owned freehold or leasehold interest in a dwelling before and who is purchasing their only or main residence. Residential property anywhere in the world is counted when determining whether someone is a first-time buyer. Where there are joint purchasers, all purchasers would need to be first-time buyers”.
From the guidance currently given, the relief would still apply where a person’s spouse or civil partner owns a property, but the buyer does not – provided their spouse or civil partner keeps their name off the title of the property. This is in stark contrast to the provisions surrounding the 3% SDLT surcharge on the purchase of additional properties, where your spouse or civil partner is treated as a joint purchaser when buying the property for SDLT reasons, even if they are not going on the title.
It is clear that it is the government’s hope that this new relief will abolish SDLT altogether for 80 per cent of first-time buyers. However, critics of the policy have been quick to suggest the new SDLT relief will do little to improve affordability of the UK’s current housing stock and could have the unintended consequences of inflating housing prices even more, as buyers flood into the market. In any event, this is welcome news for all first-time buyers and for Bishop & Sewell clients who are making their first step onto the property ladder.
At Bishop & Sewell, we have more than 30 plus years’ experience in conveyancing and have an expert team familiar with all forms of property purchase. We always treat our clients as individuals with their own particular needs and concerns. We provide you with a dedicated conveyancing lawyer to ensure the best level of service and communication from start to finish.
Charlie Davidson is a Solicitor in our Property team.
If you are thinking of buying your first property or you have any questions regarding SDLT, please call 020 7631 4141 and ask for a member of the Property team or email firstname.lastname@example.org.
This article is intended as a general summary on the law – no reliance should be placed on it.