by Housesimple on 25th January 2018
Looking to get a foot on the property ladder this year? There's some good news. Chancellor of the Exchequer Phil Hammond made a number of changes to housing taxes in the latest autumn budget, including new stamp duty relief for first-time buyers. Here's everything you need to know about what it is and how you can qualify for it.
Stamp duty (or 'stamp duty land tax', to give it its proper name) is an extra fee that buyers pay when they purchase a property in England, Wales or Northern Ireland. Scotland has a separate but similar stamp duty system, called 'land and buildings transaction tax'. It's calculated as a percentage of the sale price, with percentages rising in line with the value of the property.
Stamp duty is currently paid on the value of a property over £125,000. First-time buyer relief extends the value to £300,000, after which you'll pay the standard 5% up to £500,000. According to the Halifax First-Time Buyer Review, the average price of a first property in the UK is £207,693 (£410,000 in London) – well under the cut-off point.
Relief is available if the home is going to be your main residence – e.g. if you're not buying the property to rent out. It only applies to domestic buildings, so you also can't get a discount if your first property purchase happens to be a shop. What's more, it has to be a single dwelling, so you can't nip out and buy yourself a block of flats. To claim your relief, you have to enter code '32' into your land transaction return form.
There's a bit of bad news for those planning to buy north of the border – this relief doesn't apply in Scotland, as the country operates a different tax system. If you're purchasing your first property in Wales, act quickly – SDLT is being replaced by a 'land transactions tax' on 1 April 2018 and so this particular relief will no longer apply.
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