As of the 22nd November, stamp duty will be abolished for the majority of first-time buyers. This saving will be available in England, Northern Ireland and Wales until the end of March 2018. This is part of the 2017 budget by the chancellor Philip Hammond and aims to help fix the housing market.
Any first-time buyer looking to purchase a property under the cost of £300,000 will be exempt from paying the tax. Additionally, anyone paying up to £500,000 will only have to pay on the purchase over the threshold.
Mr Hammond has stated that 80% of first-time buyers will now pay no stamp duty when purchasing a property.
What is stamp duty?
Stamp duty land tax (SDLT) is a lump-sum tax applicable to anyone buying land or property over a certain price in England, Wales and Northern Ireland.
Under the previous system all home buyers, including first-time buyers, would pay stamp duty up to 12% on properties over £125,000. In the same way, home movers will continue to pay no stamp duty on properties up to £125,00.
The changes do not apply in Scotland which has an independent system of land tax. Stamp duty will devolve to Wales from March 2018.
How much can you save?
The below table can help you work out how much you could save as a first-time buyer on a property up to £300,000:
|Property price||Stamp duty saving|
|Up to £125,000||£0|
|£126,000 – £150,000||£20 – £500|
|£151,000 – £200,000||£520 – £1,500|
|£201,000 – £250,000||£1,520 – £2,500|
|£251,000 – £300,000||£2,550 – £5,000|
Any first-time buyer paying between £300,000 and £500,000 will pay stamp duty at 5% of the purchase price in excess of £300,000. Those purchasing a property over the cost of £500,000 will not receive any relief. However, as the typical first-time buyer pays around £208,000* the average saving will be roughly £1,660.
How Clever Mortgages can help
At Clever Mortgages, we have experience helping first-time buyers from all types of situations get on the property ladder. We work with a long list of lenders to help you find the right mortgage to go with your new home.
*Source: The Guardian, 2017