On the 22nd November 2017 the Chancellor announced the immediate abolition of stamp duty for all properties up to £300,000 bought by first-time buyers. This is one less expense to worry about and this cash can be put forward the deposit, which is the biggest hurdle in obtaining your first mortgage.
The rule is quite simple: First time buyers will pay no SDLT on the first £300,000 of the purchase price, with the remainder being charged at 5%. No relief will be available where the total consideration exceeds £500,000.
The relief is not time limited and will apply to transactions with an effective date on or after 22 November 2017.
A guidance note is available on the Government website at https://www.gov.uk/government/publications/stamp-duty-land-tax-relief-for-first-time-buyers/stamp-duty-land-tax-relief-for-first-time-buyers together with the draft legislation and explanatory note.
The change in the Stamp Duty for first time buyers will hopefully help young buyers get on to the property ladder and it will save four out of five first-time buyers up to £5,000. The Office for National Statistics has revealed that the proportion of people aged 25-34 who own their own homes fell from 59% to 37% between 2004 and 2015!
This welcome change should boost these figures in the coming years!
Those spending up to £500,000 – including most buyers in London – will also benefit, as the first £300,000 of the purchase price will not be subject to the tax. Previously the tax was paid on all purchases over £125,000.
This is great news for first time buyers who have struggled against the odds to climb the property ladder! One less expense to worry about in what is often the most expensive, scary and exciting time of your life, hooray for first time buyers!