Making Sense of the New Stamp Duty Rules

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In the Autumn statement 2017, the Chancellor, Philip Hammond, announced new Stamp Duty Land Tax (SDLT) cuts for first time buyers. Cuts which on the face of it looked set to save the average first time buyer circa £1,600.

Approximately 80% of first time buyers now look set to pay no Stamp Duty at all, with homes costing less than £300,000 exempt from the tax. However, individual circumstances have come to light since the announcement that have caused confusion for many, with couples in particular raising concerns.

Here we look to make sense of the new Stamp Duty rules for you, so whatever your situation you can understand if you’ll be able to benefit from the new framework or not, and what rate of Stamp Duty you’ll likely need to pay.


What is Stamp Duty?

SDLT is a tax you pay when you purchase property or land in England, Wales and Northern Ireland.

There is a threshold currently in place of £125,000, meaning that you don’t need to pay SDLT on any purchases costing £125,000 or less.


When does SDLT need to be paid?

Stamp Duty is usually payable within 30 days of the completion of your property purchase.


What are the changes?

First time buyers will now not need to pay SDLT on purchases of £300,000 or less.

For properties purchased up to £500,000, first time buyers will pay 5% SDLT on the amount between £300,000.01 and £500,000 only.

Based on the average first time buyer purchase price of £208,000, the average first time buyer is now set to save £1,660 under the new rules.

For purchases over £500,000, first time buyers will receive no benefit and the transaction will be subject to standard SDLT rates:



Source: SDLT Rates 


When did the changes occur?

The changes apply for all completions taking place on or after 22nd November 2017.

If you exchanged contracts prior to this date and are still awaiting completion, you may qualify for the new exemptions – contact us to discuss your specific situation, or ask your conveyancer.


How is a first-time buyer defined?

Anyone who hasn’t owned a property before, anywhere in the world.

If you have previously inherited property, this will count as you having owned property before.


My partner has previously owned a home, but I haven’t, will I still be able to benefit?

If you are buying a property jointly, unfortunately you both need to be first time buyers to qualify.


What if I am buying solely in my name?

If you are married or in a civil partnership this will affect your status as a buyer.

If your partner currently owns another property your purchase will NOT be eligible for first time buyer relief. Not only that, you will also have to pay an SDLT surcharge of 3%, on top of the standard SDLT rate. This is because your purchase will be classed as an ‘additional property’, unless your partners property is to be sold as part of your transaction. In this case you would just pay normal SDLT.


What should I do if I have unusual circumstances?

As you can see, the rules surrounding couples can make the interpretation of the SDLT rules increasingly complex. If you have unusual circumstances, or your transaction is particularly complex, it is always prudent to speak to our Conveyancing Team prior to proceeding with making an offer to purchase.

Speaking to one of our expert consultants before a purchase price is agreed can help you to avoid many potential pitfalls as your transaction progresses. You can contact the team on 01282 433 241.