Stamp Duty Change to Impact First Time Buyers
Stamp Duty Axed
Announced during the Autumn Budget 2017, Stamp Duty Land Tax (SDLT) as of 22nd November 2017, has been abolished. It comes as part of the government’s commitment to support home ownership and help first–time buyers get on the property ladder. This means that those purchasing a home for the first time in Northern Ireland, up to the value of £300,000, will pay zero stamp duty.
What is Stamp Duty?
Stamp duty land tax is a lump–sum tax that buyers pay when purchasing a property or land. The rate at which buyers pay will be dependent on that price of property or land.
What does this mean for first time buyers?
The changes apply to first–time buyers in Northern Ireland, England and Wales. Going forward, when purchasing a property, the new stamp duty rates now apply:
· Purchase price up to £300k: 0% stamp duty
· Purchase price between £300,000.01 – £500k: 5% stamp duty
· Purchase price above £500k: SDLT as normal
It is thought by the Treasury that an estimated 80% of first–time buyers will save when it comes to SDTL. However, The Office for Budget Responsibility (OBR) expects house prices to increase by 0.3% within a year as a result of this change.
Sadly, if you’re opting into for a buy to let mortgage you won’t qualify for the new rates, even if you’re a first time buyer. This is because the property you buy needs to be used as your main residence to qualify. Likewise, is you’re a first–time buyer, looking to jointly purchase a home with someone who has already purchased before, you will not qualify for the first–time buyer rates either.
Financial Foresight
Buying a property is one of the most important investments you will make throughout your life. Contact Financial Foresight today for trusted first time buyer advice that will help get you on the property ladder.
