Stamp Duty abolished for first time buyers on homes up to £300,000

In yesterday’s budget, The Chancellor abolished Stamp Duty Land Tax for first time buyers with immediate effect on properties costing up to £300,000. The government’s aim is to help first time buyers and they estimate that this move will assist 95% of first time property purchasers.

Effective immediately - Stamp Duty abolished

Clare Hallett, Conveyancing Partner, explains “If you are buying your first property and it costs more than £125,000 and up to £500,000 you will save money as of yesterday’s announcement. The 2% Stamp Duty Land Tax (SDLT) applied on every pound above £125,000 that a home costs, up to £250,000, while a 5% band applied on the band between £250,000 and £925,000.”

“So for example a £200,000 property until the budget attracted a SDLT bill of £1,500. A £300,000 purchase would have meant a £5,000 SDLT fee. SDLT on purchases up to £300,000 has now been abolished for first-time buyers.”

“Above this level, SDLT will be paid at 5%, in the £300,000-£500,000 band. So a £10,000 SDLT bill on a £400,000 property is being reduced to £5,000 and a £15,000 SDLT bill on a £500,000 home, goes down to £10,000.”

How is a first time buyer defined?

A first-time buyer is defined as someone who has never owned freehold or leasehold property before and who is purchasing their only or main residence. Beware that all purchasers need to fulfil that criteria, as otherwise the usual SDLT rates will apply.

Related information

You may find it useful to read our other articles concerning SDLT and also advice for first-time buyers.

Critics have expressed concerns that this move will not actually help those that really need it and also anticipate that it will push house prices up.

Our Conveyancing Team, based in Christchurch, also cover Bournemouth, Poole and the New Forest. For a free initial chat, please call 01202 499255 and Clare or a member of the team will be happy to discuss any questions that you may have.