Good news for first-time buyers! As you may have seen on the recent Budget, 22nd November 2017, Chancellor Philip Hammond has scrapped Stamp Duty - for first-time buyers at least...
Hold on, what is Stamp Duty? I’m guessing it's another way for the Government to part me with my money.
Well, it is a tax. A tax on property transactions to be exact and it came into effect on 1st December 2003. Stamp Duty land tax replaced the old stamp duty system which dated back over 300 years.
UK Stamp Duty Land Tax, to give it its full name, is payable on all property purchases over £125,000 and the charge applies to all purchases of houses, flats and buildings. It applies to England, Wales and Northern Ireland - Scotland has it's own system called Land and Buildings Transaction Tax.
That sucks, buying a house for the first time is expensive as it is.
Well, the Government agrees which is why in the latest budget the Chancellor announced for first time buyers purchasing a house of up to £300,000 that no Stamp Duty will be owed. As well as for the first £300,000 for property sales up to £500,000. These changes come into effect immediately.
To be eligible, you will need to declare when purchasing your property that you and anyone else purchasing the property have never previously owned or purchased property in the UK or abroad.
Stamp Duty will still be payable for other types of purchases like buy-to-let and for second homes.
Hooray, I guess buying a house just got a bit easier then?
Don't celebrate too soon. Some experts are saying this won't have much effect. They may have a point as it's the upfront deposit required to get on the property ladder that prevents most new buyers. Tome Kibasi of the Institute of Public Policy Research notes:
Unaffordable house prices are the problem, not Stamp Duty. For most young people, the stamp duty cut will make little difference. But it will help the beneficiaries of the bank of mum and dad.1 - Tome Kibasi
Further, in some parts of the country Stamp Duty was already not chargeable in a large amount of cases due to properties selling under the £125,000 threshold so will have no discernible effect in these areas.
And of course if you're not a first time buyer, and your purchase is over the threshold, you will still need to pay.
Hang on, I just bought a house just after the Chancellor’s Announcement and I paid Stamp Duty! Can I get a refund?
You are in luck; the new changes came into effect the day of the budget so for any purchase completed on or after 22nd November 2017 (and provided you are a first-time buyer) you can apply for a refund if you have paid too much Stamp Duty. Visit www.gov.uk for further for guidance on stamp duty refunds.
So where can I check how much Stamp Duty I may need to pay?
Glad you asked, give this a try: