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Stamp Duty Exemption For First Time Buyers

With effect from 22 November this year first-time buyers of residential property will not be liable to pay stamp duty on the purchase of properties up to £300,000 and the first £300,000 of properties up to £500,000

Key points:

  1. The exemption only applies to individual first-time buyers
  2. The property must be residential.
  3. The property must be for use as the only or main residence of the buyer
  4. No duty is payable on the first £300,000.
  5. 5% is payable on any remainder up to £500,000
  6. The exemption applies to freehold and leasehold properties provided that the lease is for more than 21 years.

Questions and Answers

  1. What happens if I have exchanged but not yet completed?
    You will benefit from the exemption.
  2. What happens if I have just completed but not yet paid stamp duty?
    Unfortunately, you do not benefit. The exemption only applies to completions after 22 November this year.
  3. What happens if my partner is not a first-time buyer but I am?
    Again, unfortunately, you do not benefit. Those buying in joint names must all be first time buyers.
  4. What happens if my first-time purchase is over £500,000?
    You will not be eligible for any relief and must pay duty at normal rates on the full amount. A purchase over £500,000 or one “linked” to a purchase which results in the total value exceeding £500,000 will result in the payment of stamp duty on the total amount. There are special rules regarding linked transactions on which you should take professional advice.
  5. What happens if I own property abroad?
    Anyone who has previously either alone or with others acquired a major interest in a dwelling anywhere in the world will not qualify for stamp duty relief.
  6. I previously inherited a property can I claim relief on my proposed purchase?
    No. An interest in a dwelling includes previous acquisitions by inheritance or gift.
  7. If I am in rented accommodation can I claim relief on the purchase of a buy to let property?
    No. the exemption will not apply if it is not going to be your only or main residence.
  8. I am divorced and previously jointly owned the marital home. I am now buying a property in my sole name. Do I benefit?
    Unfortunately, because of your previous ownership, you do not qualify for relief.
  9. My parents are buying a property and putting me on the deeds. Do I get relief?
    You will not do so if they already own property.
  10. Can I claim relief if I have previously acquired property as a trustee?
    You can if you were not also a beneficiary of the trust and you meet the other conditions.
  11. What about the purchase of shared ownership property?
    The exemption will only apply if you pay duty on the full market value of the property rather than a share and that market value does not exceed £500,000.
  12. What is the position in Scotland and Wales?
    That is for Scotland to decide. Buyers in Wales will benefit until April next year when the Welsh government will decide.