Stamp Duty Land Tax - First Time Buyer Relief

Stamp Duty Land Tax - First Time Buyer Relief. Are You Eligible?

The Government recently announced that 69,000 first time buyers have benefited from the abolition of stamp duty land tax (SDLT) on properties under £300,000 since the relief was introduced on the 22 November 2017.  What’s more, it is estimated that over the next five years the policy will help over a million people to get onto the housing ladder.

Craig RennieConveyancing Solicitor at HRJ Foreman Laws Solicitors provides an overview of the policy and who is eligible.  

1. Who can claim SDLT first time buyer relief?

You will need to be a first time property owner purchasing a property for £500,000 or less.  You will not - either alone, or with others – have previously acquired an interest in a property or land anywhere in the world. 

If you are purchasing a property under a shared ownership lease, first time buyer relief is available, but only if you chose to pay SDLT on the full market value rather than the value of the initial share.

You are eligible if you previously owned commercial or mixed use property as long as that property did not include any residential dwelling.

You must intend to occupy the dwelling as your only main residence.

2. Who cannot claim SDLT first time buyer relief?

You cannot claim if you have previously owned an interest in a residential property or if you have inherited a property as a gift, or in a will or trust.  

If you are purchasing with other individuals, all owners must occupy the property as their main residence. If only one owner intends to live in the property, then first time buyer relief is not available.  

If the property is a joint purchase, all parties must meet the conditions.  For example, if A wishes to purchase a house with B - but B has previously owned a flat which has been sold - neither party can claim first time buyer relief.  In this case the transaction will be taxed at the standard rates of stamp duty, providing neither A or B own a major interest in another dwelling or land. This includes the acquisition of a beneficial interest such as a beneficiary under a trust.

The relief is not available for a buy to let purchase by an individual

A company or other non-natural person cannot claim first time buyer relief nor does it apply to the purchase of commercial or mixed use properties.  

3. What are the SDLT rates?

If you are eligible for the SDLT relief you will pay:

  • 0% on the first £300,000
  • 5% on the remainder up to £500,000

The current (June 2018) standard rates, if you are not eligible are:

  • Property or lease premium or transfer value up to £125,000 – Zero
  • The next £125,000 to £250,000 - 2%
  • The next £250,001 – £925,000 - 5%
  • The next £925,001 to £1.5m - 10%
  • The remaining amount above £1.5 million - 12%

For further information or legal advice email info@hrjforemanlaws.co.uk or call Hitchin 01462 458711, Welwyn Garden City 01707 887701.  

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