Stamp Duty

 

Stamp duty relief for first-time buyers

In England and Northern Ireland, first-time buyers purchasing shared ownership properties costing up to £500,000 are now subject to the stamp duty relief available to other first time buyers. Previously, they still had to pay the tax even though all other first-time buyers were exempt on the first £300,000 on properties valued at up to £500,000 - a change which came into effect from the previous Budget last November.

Properties valued up to £300,000 are exempt from Stamp Duty Land Tax, 5% is then payable on any value above £300,000 up to and including £500,000.

 

This means that you will pay:

 

  • 0% on the first £300,000
  • 5% on the remainder up to £500,000

 

If the purchase price is more than £500,000 you can’t claim the relief and must pay the standard rates on the total purchase price.

 

Who is eligible for the Stamp Duty relief?

The new exemption in the Budget only applies to first time buyers.

To classify as a first-time buyer you must be purchasing your only or main residence and have never owned a freehold or have a leasehold interest in a residential property in the UK or abroad.

 

How does it work?

First time buyers will need to declare that they have never owned a property either in the UK or abroad. A special first time buyer code will need to be submitted with the stamp duty return once a home is purchased.

Full Stamp Duty relief is available up to £300,000, with reduced liability up to £500,000. Any purchases above £500,000 will attract the normal stamp duty rates on the whole purchase price.

 

Joint ownership and Stamp Duty relief

If a property is being purchased by more than one individual then all parties will need to be first time buyers to qualify for the relief.

 

How to pay Stamp Duty

Your solicitor will usually deal with the Stamp Duty return and any payment due for you, although you can do it yourself.

Either way, you’re responsible for making sure it’s all submitted on time.

If the price of your new home is under £125,000, you must still submit a return (unless exempt) even though you won’t need to pay any Stamp Duty.

 

Are you looking for a new home in London or the South East?

Southern Home Ownership is dedicated to providing stylish, high quality and contemporary new homes for sale on a Shared Ownership basis.

If you're a first-time buyer in London and interested in owning a Shared Ownership property in London or the South East, then click on this link to take a look at our Latest Developments.

 

Last updated on: 30.11.2018.