First Time Buyers Tax Relief
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If you ever speak with a Financial Adviser about investing in property they will probably say that it offers good returns, but is terrible in terms of tax planning! They were probably right, until the Chancellor of the Exchequer made sweeping changes to Stamp Duty for first time buyers in last months Budget!
The recent announcement in the October Budget that Stamp duty land tax has been abolished for first time buyers on the first £300,000 for properties worth up to £500,000 has suddenly made investing in property a lot more appealing!
Phillip Hammond the Chancellor of the Exchequer has introduced a new flagship policy to abolish stamp duty for first time buyers. This new relief from Stamp Duty will raise the price at which property becomes liable to SDLT to £300,000 for first time buyers. No relief is available for properties valued at over £500,000.
If you are a first time buyer and the property will be used as your main residence, then the relief can save you a significant amount of money. For example, if you are buying a £300,000 property, before the change you would have had a SDLT bill of £5,000. Your liability after the change is now 0, a saving of £5000!
This relief is estimated to cut the amount of first time buyers paying SDLT by 80%, and benefit 95% of first time buyers. It is expected to stimulate the housing market, which has remained stagnant over the past 6 months, and it will help over one million buyers get on the property ladder over the next 5 years.
The definition of a first time buyer is one who has never owned any interest in freehold or leasehold property, and who is purchasing their only or main residence. Residential property anywhere in the world is included when ascertaining eligibility of the relief. If there are joint purchases (e.g husband and wife) then both need to be first time buyers.
The relief applies to all transactions from 22nd November 2017.
For those whose cash flow is already constrained, this will come as a welcome relief!
If you would like a tax & mortgage consultation, please get in contact with a member of the Mortgages for Yacht Crew team, who would be happy to help:
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