First Time Buyers and Stamp Duty Land Tax

The 2010 Budget statement made by the Chancellor on 24th March 2010 outlined a new relief from Stamp Duty Land Tax (“Stamp Duty”).

In essence, to qualify a buyer must:
  • be an individual or group of individuals;
  • complete their purchase before 25th March 2012;
  • pay no more than £250,000 for the property;
  • purchase a “major interest” (which means either freehold property or a leasehold property that has an unexpired leasehold interest of at least 21 years);
  • purchase a property that is wholly residential;
  • intend to occupy the property as their only or main residence; and
  • never previously have acquired a major interest (as described above) in residential property anywhere in the world.

To claim the relief a buyer must be able to satisfy all the listed requirements.

So, who can’t take advantage of the new relief? Certainly, those falling into the following categories will not qualify:

a buyer who has previously owned their home;
  • couples where one of the buyers has previously owned their home;
  • investment buyers;
  • companies;
  • trustees (although there may be some limited exceptions);
  • commercial partnerships;
  • buyers of holiday homes;
  • buyers who have previously owned an inherited property; and
  • buyers who are buying on behalf of their children or parents.

So, if you’re not a genuine first-time buyer, you have no reason to get excited about this new relief. It won’t apply to you and you will still have to pay 1% Stamp Duty on the completion of your purchase if the purchase price is more than £125,000 (£150,000 in a “disadvantaged area”) and does not exceed £250,000.