Here we explain what the Chancellor’s latest announcement means in reality.
The Chancellor Phillip Hammond has delivered the 2017 Budget in which he said: “The dream of home ownership should be a reality for all generations” and in line with this has abolished stamp duty for first-time buyers for house purchases up to £300K.
Over the next 5 years £44 billion will be provided to support the housing market. By around 2020 there should be 300,000 homes being built every year.
The government will amend SDLT higher rates for additional properties with immediate effect. The changes will benefit those increasing their share of their own home, families affected by a divorce court order, and cases where properties are held in trust for children subject to Court of Protection orders. The government will also remove a potential opportunity for avoidance.
SDLT the new rules applies to:
- Transactions which complete today or after today (22 November 2017)
- where an individual or individuals jointly purchase wholly residential property, and at a price of not
more than £500,000
- where that individual (or all of them) intends to occupy the property as his/her or their only or main
- that individual (or all of them) has or have not, whether alone or with others, previously acquired a freehold or leasehold interest in residential property in the UK (expect a lease with less than 21 years to run) or an equivalent interest anywhere in the world.If the conditions are met then no SDLT is payable on a purchase price of £300,000 or less, and only tax at 5% is payable on the part of the purchase price paid in excess of £300,000.
Questions & Answers
Q1. What is a first time buyer?
A. A person who has not acquired a freehold or leasehold interest in residential property in the UK (except a lease with less than 21 years to run) or an equivalent interest anywhere in the world.
Q2. When is the relief available?
A. The relief is available for transactions with an effective date (usually the completion date) on or after 22 November 2017. No end date has been mentioned in the brief guidance provided today.
Q3. I previously bought a house jointly with my spouse/ partner. The partnership has broken up so can
I be treated as a first time buyer?
A. No. Where the individual has previously acquired an interest in a residential property as a joint tenant or a tenant in common the individual is not a first time buyer.
Q4. Is the relief available on transfers of interests in a home between partners?
A. Such a transfer normally requires a transfer from the existing owner to him/herself and the partner. Even if the partner is a First-time buyer the existing owner is not. So the relief is not available.
Q5. Can I get relief if I have previously owned an inherited property?
A. No. In this case a person will previously have acquired a major interest in a residential property.
Q6. Can I claim the relief if I’m buying on behalf of my parents?
A. No. Relief is not available unless the first time buyer(s) are buying, for themselves, a property that they intend to use as their only or main residence.
Q7. Is there an age limit on claiming the relief?
A. No. First time buyers can be of any age.
Q8. Is there a price limit on claiming the relief?
A. Yes, the sum for the whole of the purchase must not exceed £500,000.
If you have any questions or require any guidance on these matters please contact us on 01785 594756.