Philip Hammond, the Chancellor of the Exchequer, delivered the Autumn Budget on 22 November 2017 and in doing so announced a number of changes to the Stamp Duty Land Tax (‘SDLT’) regime.
Relief for first-time buyers
The Budget includes an immediate and indefinite SDLT relief for first-time buyers of residential property with a value of up to £500,000.
The relief, which took effect from Budget day, provides that:
– SDLT will be abolished for first-time purchases with a value of up to £300,000;
– those purchasing for a value between £300,000 and £500,000 will pay SDLT at 5% on the amount of the purchase price exceeding £300,000;
– first-time buyers purchasing for over £500,000 will pay SDLT at the ordinary rate of 5%.
Broadly, and as with prior SDLT reliefs, a first time buyer for these purposes is someone who has never owned an interest in residential property (anywhere else in the world) who is purchasing the premises as their only or main residence.
Where there are joint purchasers, all purchasers would need to be first-time buyers. Purchasers, generally acting by their solicitors, will need to file an SDLT return to claim the benefit of the relief.
Higher rates for additional dwellings
Separately, the government announced amendments to the application of the 3% surcharge payable in relation to the acquisition of additional residential dwellings.
The higher rates of SDLT have applied since April 2016 to all who purchase residential property when they already have a major interest in at least one property, and who are not replacing their main residence. The higher rates are 3% above the standard rates of SDLT.
The amendments grant relief in certain instances, including:
– where a divorce related court order prevents someone from disposing of their interest in a main residence;
– where a spouse or civil partner buys property from another spouse or civil partner;
– where a deputy buys property for a child subject to the Court of Protection;
– where a purchaser adds to their interest in in their current main residence, or extends their lease.
The government has confirmed that the proposed reduction to the SDLT payment and filing period from 30 to 14 days, originally announced in the Spring 2017 Budget, will take effect from 1 March 2019
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