Stamp Duty abolished for First Time ‘Buyers’ – is it really that simple?
As of 22 November 2017, certain individuals who buy a residential property in England, Wales and Northern Ireland, at a price up to £300,000 can claim a complete exemption from stamp duty, and a flat rate of 5% stamp duty on the portion from £300,001 to £500,000.
The lucky ones are being referred to as ‘first time buyers’, but more accurately it should be first time ‘owners’, as exemption applies to buyers who have never previously ‘owned’ a residential freehold or leasehold (over 21 years duration) property, or part of one.
The word ‘owned’ includes having purchased, having been gifted, having inherited, or by a financial institution on behalf of a person under an alternative finance scheme – and even a trustee buying if they were also a beneficiary.
However, the fine print does not stop there. There are 4 extra hurdles before exemption can be claimed:
1. If there is more than one buyer, then all must qualify for the exemption, or they all fail;
2. Previous ownership includes anywhere in the world, not just the UK;
3. There must be an ‘intention to occupy’ the property as the main residence;
4. The property being purchased must be a single dwelling (i.e a self-contained part of a building where residents can live independently can disqualify the exemption)