The Chancellor Philip Hammond delivered a very welcome helping hand for first time buyers, by abolishing Stamp Duty on properties worth under £300,000. Plus, on properties that are worth under £500,000, they don’t have to pay Stamp Duty on the first £300,000.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. The Financial Conduct Authority does not regulate tax advice.
Historically, it has become very difficult for first time buyers to get on the housing market as house prices have continued to rise, in many places outstripping the rise in wages.
The move by Philip Hammond may help first time buyers to purchase a property more quickly.
What is Stamp Duty?
Stamp Duty is a tax that anyone purchasing a property or land must pay. The amount you pay is based on the property value.
Summary of stamp duty costs for first time buyers:
Property price | Pre-Budget | Post-Budget (from 22 Nov 17) |
£200,000 | £1,500 | £0 |
£208,000 (average first time buyer price) | £1,660 | £0 |
£300,000 | £5,000 | £0 |
£400,000 | £10,000 | £5,000 |
£410,000 (average first time price in London) | £10,500 | £5,500 |
£500,000 | £15,000 | £10,000 |
£500,000 plus | Unchanged | Unchanged |
Source: Telegraph
Important notes:
If you purchase a property costing more than £500,000, you won’t be able to benefit from the change and you will have to pay Stamp Duty based on the standard system.
If you have owned a property before you will not be able to benefit from the change.
If you are purchasing a property that is intended to be used as a buy-to-let you will be excluded from the new scheme.
And, if you are purchasing a property with someone who already owns a property or who has owned a property previously, you will be excluded from the scheme.
Other forms of help for first time buyers
If you are not eligible to benefit from the Stamp Duty change, there are other schemes that you may be able to use, such as; Help to Buy, Help to Buy (Equity Loan), Help to Buy ISA, Lifetime ISA, Starter Homes Scheme, Shared Ownership and Right to Buy.
Some of these are covered in our article, ‘What help is available for first time buyers, buying alone’.
For first time buyer mortgages, speak to an independent mortgage advisor.
Looking for your first mortgage now?
Did the recent stamp duty exemption mean you are now able to seriously start looking for your first home? For mortgage advice from an independent mortgage broker, contact Chris.
Tel: 01403 780 770