The Association of Taxation Technicians (ATT) has welcomed the Stamp Duty Land Tax (SDLT) exemption announced for first time buyers at the Autumn Budget today.
The relief takes effect immediately, and will affect all purchases made by first time home buyers for less than £500,000. Purchasers of property costing less than £300,000 will pay no SDLT, while those paying between £300,000 and £500,000 will pay a five per cent rate on the amount over £300,000.1
The relief is targeted at first time buyers who will occupy the property as their main residence after purchase. However, they will not be required to occupy the property immediately, which will be helpful if the property requires renovation work.
Yvette Nunn, Co-chair of ATT’s Technical Steering Group, said:
“For a first time buyer purchasing a home at the English average house price2 of £243,945 this represents a saving of £2,378.
“It is particularly pleasing that the change will take effect immediately, otherwise any property chains including a first time buyer could have found them wanting to delay.
“Couples buying together need to be aware that both of them must be first time buyers. If one has owned a property in the UK - or anywhere in the world - before, this will disqualify them from the relief. Individuals buying with help from their parents will also need to take care that if their parent takes a share of the property, and that parent owns or has owned property, this will exclude them from the relief.
“Individuals buying in Scotland need to be aware this will not apply to them, as Scottish house purchases are subject to Land and Property Transaction Tax (LBTT) instead of SDLT. It will be interesting to see if any similar changes are made north of the border at the Scottish Budget on 14 December.
“The last time we had a relief for first time homeowners, the relief was limited to a two-year period and was withdrawn by George Osborne in March 2012. This time we have been promised that the relief will be a permanent feature of the SDLT legislation which gives those first time buyers not yet in a position to buy, more time to save.”
Notes for editors
- HMRC’s guidance note on the new relief can be found here.