News

Mar 30

Stamp Duty: Good News for First Time Buyers

First time buyers are to be given a boost onto the property ladder thanks to yet another ‘scrappage scheme’, this time on Stamp Duty for homes costing less than £250,000.

The new threshold, which will be funded by an increase in Stamp Duty to 5% on homes costing £1million plus, commenced on 25 March 2010 and will run for two years.

During the ‘Stamp Duty holiday’, nine in every ten people buying a home for the first time, provided it is their main residence and not a holiday home or buy to let property, will not be liable for the tax.

The National Association of Estate Agents commented positively saying: “This announcement has added a new rung to the property ladder, one within reach of thousands of young families.”

What constitutes a first time buyer?

The description of a first time buyer given by HMRC is a strict one. It appears to exclude anyone who has ever owned a property elsewhere, including anywhere else in the world, and anyone who has previously owned a home and is now looking to buy with a new partner. This even applies to part ownership schemes.

The guidance says, “The purchaser must not, either alone or with others, have previously acquired a major interest in land which includes residential property, or an equivalent interest in land situated anywhere in the world.”

However, if the new purchase is to be made in the sole name of the partner who has not previously bought property, the Stamp Duty relief will apply.

Stamp Duty previously put a dent in the pocket of first time buyers to the tune of 1% of the purchase price on properties between £125,000 and £250,000.

Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.

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