First Time Buyers, Stamp Duty Land Tax

First Time Buyers and Stamp Duty Land Tax and Minor Amendments to Higher Rates

The Chancellor of the Exchequer has announced several changes to Stamp Duty Land Tax in today’s budget.  To keep our clients informed and up to date, below is a summary of the key points.

Stamp Duty Land Tax: Relief for first time buyers

A relief for first time buyers of residential properties costing no more than £500,000. First time buyers will pay no SDLT on the first £300,000 of the purchase price, with the remainder being charged at 5%. No relief will be available where the total consideration exceeds £500,000.

The relief is not time limited and will apply to transactions with an effective date on or after 22 November 2017. Legislation will be introduced in Finance Bill 2017 to 2018.

A guidance note is available on gov.uk, together with the draft legislation and explanatory note.

First time buyers can use the gov.uk calculator to work out their stamp duty land tax liability.

Stamp Duty Land Tax: Minor amendments to higher rates

Minor amendments to provide relief in certain cases including –

  • where a divorce related court order prevents someone from disposing of their interest in a main residence,
  • where a spouse or civil partner buys property from another spouse or civil partner,
  • where a deputy buys property for a child subject to the Court of Protection,
  • where a purchaser adds to their interest in their current main residence.

Additionally, legislation will be provided to prevent abuse of relief for replacement of a purchaser’s only or main residence by requiring the purchaser to dispose of the whole of their former main residence and to do so to someone who is not their spouse.

The changes will apply from 22 November 2017. Legislation will be introduced in Finance Bill 2017 to 2018.

ATED: 2018 to 2019 annual chargeable amounts

The ATED annual charges will rise 3% from 1 April 2018 in line with the September 2017 Consumer Prices Index. A Treasury Order confirming the charges will be published shortly after Budget.

The new rates will be –

Property Value Annual chargeable amounts for the 2017 to 2018 chargeable period Annual chargeable amounts for the 2018 to 2019 chargeable period
£500,001 to £1,000,000 £3,500 £3,600
£1,000,001 to £2,000,000 £7,050 £7,250
£2,000,001 to £5,000,000 £23,550 £24,250
£5,000,001 to £10,000,000 £54,950 £56,550
£10,000,001 to £20,000,000 £110,100 £113,400
£20,000,0001 and over £220,350 £226,950

Great news for First Time Buyers

The changes apply from today so any first time buyer purchasing a property and completing from today will not have to pay Stamp Duty Land Tax if they are purchasing the property for £300,000 or less.

The calculator referred to earlier is a very helpful online tool but please do not hesitate to contact Gaddes Noble Property Lawyers if we can be of any assistance with the new rates of SDLT.

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