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It was announced in Budget 2017 that first time buyers would potentially qualify for relief from Stamp Duty Land Tax (SDLT). Budget 2018 extended the relief further.
Amount of Relief – Stamp Duty First Time Buyer
First time buyers who qualify for the relief will not have to pay any SDLT on the first £300k of chargeable consideration.
As such, where the property is purchased for less than this amount and the buyer qualifies for the relief then he or she will not pay a penny of tax.
Where the price is between £300k – £500k then they pay 5% on the amount in excess of £300,000.
However, if the purchase price exceeds £500,000 then the full rates of SDLT will apply without any relief.
|Up to £300k||0%|
|Between £300k – £500k||5%|
|Over £500k||Normal rates apply to FULL purchase price|
Definition of First-Time Buyer
A first-time buyer is:
As such, a limited company or a limited liability partnership (LLP) cannot benefit from the relief.
If a property is acquired under a bare trust, then the tests above are applied to the beneficial owner / trustee.
The relief will only apply where each of the buyers qualifies as a first-time buyer.
If, for example, there are two purchasers and one of them has previously bought a property anywherethen the relief will not apply. This is despite the fact that the other buyer has not purchased a property previously and might qualify as a first time buyer in their own right.
Shared ownership buyers will have a choice when it comes to how and when they pay their SDLT liability:
Where a person is purchasing a share in a property worth over £500k then this will not qualify for the relief at all. They will pay SDLT in full. This is the case even if the share being purchased is below £500k.
If you have any queries regarding stamp duty relief first time buyers, or stamp duty in general, then please get in touch
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