You’ve finally got to a stage in life where you can put an offer in and purchase your first home. After years of renting and saving this is a huge moment so congratulations, according to some reports as many as one in three UK millennial's will never own their own home.
To stimulate the housing market and help young people get onto the housing ladder the government have made this process much more appealing by waiving stamp duty charges for the majority of first time buyers. Fantastic news if you are buying your first house!
So what criteria do you have to meet to be eligible for this benefit:
- To be classified as a first-time buyer you must never have owned a residential property in the UK or abroad. This includes freeholds and interests in leaseholds.
- You must also be purchasing your only or main residence. This means first-time buyers cannot get Stamp Duty relief on buy-to-let properties.
What does this mean:
- As a first-time buyer you will no longer pay Stamp Duty on properties worth up to £300,000.
- If the property is worth between £300,000 and £500,000, you will pay no Stamp Duty on the first £300,000, but will pay the standard 5% on the remaining amount. For example, if the property is worth £450,000, you will pay no Stamp Duty on the first £300,000 and 5% on the remaining £150,000. Under the old system, first-time buyers would pay £12,500 in Stamp Duty on this £450,000 property. The new system means they will pay just £7,500.
- Stamp duty exemption now also applies on first home purchases up to £500,000 where the property is part of a shared ownership programme (in England and Northern Ireland). The previous tax-free threshold was £300,000 for all first time buyers.
It is worth noting that if you have ever previously inherited a house or been on the deeds to a family members property then you won’t be eligible for any stamp duty exemption.
Now you have all the facts good luck with your first house move!