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Stamp Duty for First Time Buyers

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What is stamp duty?

Stamp duty is a lump sum that you are liable to pay when you buy a residential property or a piece of land costing more than £125,000.00 (or more than £40,000.00 for second homes). This tax applies to freehold and leasehold properties.

Who Qualifies as a First Time Buyer?

You can only qualify as a first-time buyer if you have never owned a property in England or overseas. If you are buying as joint owners, you must both be first time buyers. If you are not sure whether you qualify as a first time buyer, please speak to our Emery Johnson Astills Conveyancing team in Leicester and Loughborough and we will be more than happy to discuss.

Purchase of Single-Dwelling

First time buyers Relief is only available for the purchase of a major interest in a single dwelling. If you are buying more than one dwelling in a single transaction this will not give rise to relief. You will need to determine whether the premises you are buying consists of one or more dwelling. For example, if the property includes an annex and you can live in the annex independently of the residents of the rest of the buildings, including independent access and domestic facilities, the relief will not be available.

Stamp Duty for First Time Buyers

If you are a first-time buyer, you are exempt from stamp duty for properties up to £300,000.00. If you buy a property up to £500,000.00 you will not pay Stamp Duty on the first £300,000.00 and but will pay 5% on the remaining amount.

For example, the tax due on the purchase of a dwelling by a first time buyer for £450,000.00 would be £7,500.00. On the first £300,000.00 you will be exempt from Stamp Duty. On the remaining £150,000.00 you will pay 5% which is £7,500.00.

If the property you are buying is worth over £500,000.00 you will pay the standard rates of Stamp Duty and will not qualify for first-time buyer’s relief. The standard rates are: -

  • 0% on the first £125,000.00 paid (this includes shared ownership properties if the share is under £125,000.00)
  • 2% on the property price between £125,001.00 and £250,000.00
  • 5% on the property price between £250,001.00 and £925,000.00
  • 10% on the property price between £925,001.00 and £1,500,000.00
  • 12% on the property price of £1,500,001 and over

First Time Buyers Shared Ownership Schemes

As of October 2018, if you are first time buyer under Shared Ownership schemes you can now claim first-time buyers stamp duty relief on homes worth up to £500,000. This change applies to homes purchased on or after 22 November 2017.

Unlike the stamp duty exemption for first time buyers, the rules for shared-ownership purchases also apply retrospectively to 22nd November 2017. So, if you purchased a shared-ownership property after that date and paid stamp duty, you are eligible for a refund.

Our Emery Johnson Astills Conveyancing Team in Leicester and Loughborough are happy to assist if you are buying or selling a house.

If you require assistance or further information, please contact our Emery Johnson Astills Conveyancing Team on 0116 2554 855 (Leicester) or 01509 610 312 (Loughborough).