Stamp Duty advice

From the recent Autumn budget on the 22nd November 2017 there is great news for hard-pressed young people trying to get on the housing ladder! In his Budget, Chancellor of the Exchequer Philip Hammond announced the immediate scrapping of Stamp Duty altogether for first-time buyers purchasing properties up to £300,000, or on the first £300,000 of properties worth up to £500,000.

This equates to a saving of as much as £5,000, and effectively means that 80% of all first-time buyers outside London are now exempt from Stamp Duty altogether! - compared to just 21% before the change came into force.

For those first-time buyers already looking for properties, the saving may allow them to purchase a property which was previously just out of their price range - so giving them more choice. The saving could also unlock more attractive mortgage options, since better rates are often available for borrowers with a larger deposit – potentially resulting in even greater savings.

For many first-time buyers, the change will also reduce the time needed to save up a sufficient deposit, while helping to boost confidence in the housing market. The fact that house prices may be affected is no bad thing, either. After all, no-one wants the property they are buying to fall in value – so this should encourage buyers to go ahead.

Finally, used in conjunction with the Help to Buy scheme, the change represents a double positive for New Homes. Under the scheme, which is available on new build properties costing up to £600,000, you only need a 5% deposit, with an additional 40% (in London) being provided by the Government in the form of an equity loan, interest-free for the first 5 years. The buyer then only has to find a 55% mortgage. For first-time buyers, that 5% deposit is suddenly much easier to find!

Stamp Duty rates for residential property in England and Wales:

First-Time Buyers

Under £300,000

  • No Stamp Duty is charged (but don't forget that you or your solicitor must still submit a SDLT return)

Price between £300,000 and £500,000

  • No Stamp Duty on the first £300,000 and a 5% duty on the remainder of the price up to £500,000

Price over £500,000

  • The rules are the same for Other Buyers as described below

Other Buyers

Under £125,000

  • No Stamp Duty is charged (but don't forget that you or your solicitor must still submit a SDLT return)

Price between £125,001 and £250,000

  • No Stamp Duty on the first £125,000 and a 2% charge on the remainder of the price up to £250,000

Price between £250,001 and £925,000

  • No Stamp Duty on the first £125,000; a 2% charge on the portion of the price between £125,001 and £250,000; a 5% charge on the portion of the price over £250,001

Price between £925,001 and £1.5m

  • No Stamp Duty on the first £125,000; a 2% charge on the portion of the price between £125,001 and £250,000; a 5% charge on the portion of the price between £250,001 and £925,000; a 10% charge on the portion of the price between £925,001 and £1.5 million

Purchase price over £1.5m

  • No Stamp Duty on the first £125,000; a 2% charge on the portion of the price between £125,001 and £250,000; a 5% charge on the portion of the price between £250,001 and £925,000; a 10% charge on the portion of the price between £925,001 and £1.5 million; and then a 12% charge on the portion of the price over £1.5 million

The government has a complete description of the rules including how they apply for shared ownership properties and when you own more than one property.

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