Government announces tax break for First Time Buyers
In a throwback to the period between 2010 and 2012, the Government has today re-introduced differential treatment between first time buyers and those who have previously owned a residential property. It is noteworthy (with the benefit of hindsight) that certain sections of the HMRC Stamp Duty Land Tax Manual had been updated earlier this year when there was no apparent need to do so!
The definition of First Time Buyers is quite literal and there are few (if any) gaps in the definition that can be exploited, but if you have never owned a residential property before (anywhere in the world) then you will pay no Stamp Duty Land Tax (SDLT) on the first £300,000 of your first property purchase (unless, that is, you are buying for in excess of £500,000 in which case you will lose the First Time Buyer relief altogether).
The SDLT charge on the first £300,000 of a property’s purchase price is £5,000, so those completing on their purchase from today onwards enjoy a real bonus.
The measures are estimated to cost the Treasury around £125m to the end of the current financial year, and then between £550m and £660m in the years that follow.
UPDATE: 11 DECEMBER 2017
Stamp Duty Land Tax is due to be replaced by a Land Transaction Tax in Wales in April 2018 (click here for details).
The Welsh Assembly Government has now announced that threshold for the equivalent first time buyer relief will be £180,000 for properties in Wales.