For first time buyers in England there is at last some good news, and as it has been all over the media, you would have heard the headline that SDLT has been abolished for first time buyers.
This is not exactly the case but there are now different rules for first time buyers buying the first home. So if you are a first time buyer you will get a discount (relief) that means you pay less or no tax if:
- you complete your purchase on or after 22 November 2017
- the purchase price is £500,000 or less
- you, and anyone else you’re buying with, are first-time buyers
SDLT is payable on the purchase of:
- a freehold property
- a new or existing leasehold
- a property through a shared ownership scheme
Or on the transfer of land or property in exchange for payment, e.g. you take on a mortgage or buy a share in a house.
To qualify of the relief all purchasers must be first time buyers, as it is an all or nothing relief. So, in purchases where there is more than one buyer, one of which is a first time buyer and the other isn’t, then no relief is given.
It is also a requirement that the property being purchased is going to be the home of the buyer. So, for example, if you are buying it to rent it out, then the relief would not be given.
It is important to be clear on what you will be paying for SDLT at the outset of your purchase so that you can budget properly.
For residential purchasers, the SDLT rules are more complex than they were and a good place to start with working out your SDLT liability is the Government’s SDLT calculator. If you think that your SDLT situation is complex you should seek the advice of an expert (which is usually an accountant) early on.