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First-time buyers and Stamp Duty: Your questions answered

Chancellor Philip Hammond gave first-time home buyers a tax break in his autumn Budget. Those buying for the first time on a property worth up to £300,000 won't now pay any Stamp Duty Land Tax while those buying on properties valued at up to £500,000 in London and other expensive areas will be exempt from paying Stamp Duty on the first £300,000 of the transaction.

Those looking to get on to the housing ladder for the first time will benefit from the tax break. Read our Q&A for all the information you need on Stamp Duty and whether you need to pay it.

Q: If I buy with someone who's bought a house before, do we have to pay Stamp Duty?

A: The short answer is yes. The Treasury's definition of a first-time buyer who has never owned freehold or leasehold interest in a property before and who is purchasing their only or main residence. Where you are joint purchasers, all those involved in the transaction must be first-time buyers.

Q: I have never owned a property in the UK, but I own a holiday apartment in Spain. Am I still counted as a first-time buyer?

A: No. Again the Treasury considers if you own property anywhere else in the  world that you are not a first-time buyer and so cannot be exempt from paying Stamp Duty Land Tax.

Q: I'm a first-time buyer looking to purchase in Scotland. Can I benefit from this exemption on Stamp Duty Land Tax?

A: Stamp Duty is a devolved issue in Scotland and is known as the Land and Buildings Transaction Tax. Therefore, buyers in Scotland will not benefit from the Chancellor's announcement in November. Any change in Stamp Duty exemption is a matter for the Scottish Government.

Q: I'm a first-time buyer in Wales. Am I entitled to the Stamp Duty exemption?

A: Stamp Duty will apply in Wales until April 2018 when this tax will be devolved to the Welsh Government and a new Land Transaction Tax introduced. So, if you're buying in Wales and complete before March 31, 2018, you will not have to pay Stamp Duty Land Tax on any first-time buyer transaction up to the value of £300,000. The rules in Northern Ireland remain the same as in England.

Q: What are the Stamp Duty rates now for first-time buyers?

A: You will pay nothing if the property is valued at up to and including £300,000, then 5 percent of the purchase price for properties valued at £300,000 to £500,000. The standard Stamp Duty rates apply on all purchases above £500,000.

Q: How do I apply for exemption from paying Stamp Duty Land Tax?

A: Your solicitor will complete the Stamp Duty return as part of the conveyancing process. He or she will enter a code on to the return to indicate you are a first-time buyer and then calculate if any duty is due according to the new rates.

 

Updated SDLT tax bands for 1st-time buyers
Tax Band %
£0 - £300000 0%
£300000 - £925000 5%
£925000 - £1500000 8%
£1500000+ 15%
Example of stamp duty for 1st-time buyers
  Before Budget November 22 Onwards
£200,000 £1,500 £0
£208,000 – average 1st-time buyer property in the UK £1,660 £0
£300,000 £5,000 £0
£400,000 £10,000 £5,000
£410,000 – average 1st-time buyer property in London £10,500 £5,500
£500,000 £15,000 £10,000
Above £500,000 Stamp duty is unchanged on purchases above £500,000  

If you're a first-time buyer, check out Homeward Legal's comprehensive First-Time Buyers' Hub where all your questions about purchasing for the very first time are covered in detail.

Free Guides for First Time Buyers

Homeward Legal has put together some handy guides to help you with your first property purchase. Let us know if there is anything we've missed, and as ever, feel free to call 0800 038 6699

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Step-by-step guide to buying
Essential checklist for moving as a first-time buyer
10 things to know when you view a property