You want to spare some thousands of pounds? Here’s the right place. First Time Buyers are eligible to receive a discount on stamp duties… but you need to meet some criteria. Let’s find out which ones.
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From 2017, stamp duty has been waived for first-time buyers on the first £300,000 cost of all residential homes worth up to £500,000.
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This means that first-time buyers…
- …pay zero stamp duty on homes worth up to £300,000
- …pay 5% on homes costing between £300,001 and £500,00 – but only on that slice of the purchase price
- …pay regular stamp duty on homes costing more than £500,000. On a £600,000 home for example, you would pay 2% on the slice between £125,000 and £250,000 and 5% on slice between £250,000 and £925,000, totalling £20,000.
But how does the Government define a first-time buyer and what else does it take to qualify for the tax perk?
Here’s a round-up of what you need to know.
1 Bedroom Flat to Rent in Shoreditch: https://www.marylebonepropertiesint.com/property/london-shoreditch-exchange/
Am I a first time buyer?
If you have never owned properties (or also shares) in the UK and abroad, you are a first-time buyer. This means not only that you never purchased one, but also that you never gifted or inherited one as well
As a first time buyer, you will also have to live in the property and not buy it for the first time as an investment to let it out.
I am buying with someone else and they are not first time buyers… Am I still one?
Unfortunately, you will not be classified as a first-time buyer. Also, the other people buying with you would have to be the same. In a similar case, you will have to pay the normal stamp duties rates.
Does the Regulation apply all over the UK?
Only in England and Northern Ireland. Northern Ireland, Scotland, and Wales charged taxes over the purchase of a property but the process is different.
What if I am buying a Freehold property?
The Regulation applied to both Freehold and Leasehold properties. In the case of leasehold property, just check the lease is more than 21 years.
I have a shared ownership property. Can I have a discount if I purchase further shares?
Unfortunately, as you own already some shares of a flat, you are not classified as a first time buyer and will have to pay similar stamp duties.
And If am buying through the Help to Buy Scheme or shared Ownership?
Yes. So long as you meet the criteria of a first-time buyer, you’ll be eligible for the stamp duty break when purchasing under the Government’s Help to Buy scheme.
I am a first time buyer… How can I chack how much I am to pay?
A. This calculator from HMRC should do the trick.
