SDLT help for first time buyers….. or sellers?
Wed 22 Nov 2017
The Chancellor announced that Stamp duty land tax (SDLT) will be abolished with immediate effect for first time buyers purchasing a home for £300,000 or less. For homes costing up to £500,000, no SDLT will be paid on the first £300,000 with 5% being paid on the excess over £300,000. First time buyers acquiring a home for more than £500,000 will receive no relief and will pay SDLT at the normal rates
Unlike the previous relief for first time buyers, which was introduced in 2010 for a temporary two year period, the changes now announced are intended to be permanent, or as permanent as any change in tax can be.
A first time buyer is defined in the Budget notes as an individual or individuals who has not previously purchased an interest in a residential property anywhere in the world and who intends to occupy the property being purchased as their main residence. Ownership includes not only a freehold interest but also a leasehold interest that has a remaining term of at least 21 years at the time it was or is acquired.
The relief will be available for qualifying acquisitions with an effective date (which will normally be the completion date) on or after 22 November 2017.
The relief will be available for first time buyers buying property in England and Northern Ireland, and also temporarily for property in Wales until 1 April 2018 when SDLT will be devolved to Wales to be replaced by Land Transaction Tax. Buyers of Scottish property will not benefit from this change as Land and Buildings Transaction Tax replaced SDLT for Scottish properties on 1 April 2015. First time buyers in Scotland will therefore pay tax on any home purchase costing in excess of £145,000 unless the Scottish Government announce a similar relief in their December budget and it remains to be seen whether a similar relief will be introduced next year in Wales.
Finally, it remains to be seen whether this measure will actually reduce the cost to first time buyers of getting on the property ladder or whether sellers will simply endeavour to increase the asking price to reflect the SDLT saving.
For further information please contact James.Summers@mazars.co.uk
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