Calling First Time Buyers

If you are entering the property market to buy a home for the first time then this Budget contains good news for you.

For the next 2 years, anyone who is genuinely acquiring an interest in property for the first time in which they will live will be exempt from Stamp Duty Land Tax on properties where the purchase price does not exceed £250,000. Previously Stamp Duty Land Tax at 1% of the full purchase price was payable for properties where the price was between £125,000 and £250,000. This therefore represents a major saving for first time buyers.

If you have already exchanged contracts on your purchase, but are completing on or after 25th March then you will be eligible for the exemption and need to ensure that your solicitor applies the exemption for you when submitting the Stamp Duty Land Tax return.

The exemption will not assist all individuals who are purchasing on their own for the first time. For example, a couple who are divorcing and each one is having to buy on their own will not qualify, and nor will those who have previously inherited an interest in residential property. Similarly, investors or overseas residents purchasing for the first time in this country, but having held property elsewhere in the world, will not qualify.

At the other end of the spectrum the sting in the tail is that with effect from April 2011 anyone purchasing a property at a price in the excess of 1 million pounds will pay 5% Stamp Duty Land Tax on the whole purchase price instead of the 4% currently applicable.

For further information about buying and selling homes, contact Myfanwy McDonagh, Head of Residential Property.