What is stamp duty?
Stamp duty is a tax you pay on purchases of a residential property costing more than £250,000; unless you qualify for first-time buyer relief.
The first-time buyer relief undoubtedly helped increase the number of people able to get on the property ladder. However, many clients are unaware of whether they can benefit from it.
What is a first-time buyer?
A first-time buyer is an individual or couple who has never owned or had an interest in a residential property in the UK or overseas. If one person in a couple purchasing has owned a property before, the couple will not qualify for first-time buyer relief.
You would also not be able to use the exemption if you inherited a property.
What is the exemption?
As of 22nd September 2022, first-time buyers in England are exempt from paying stamp duty tax on properties purchased up to a value of £425,000. This means first-time buyers can save up to £8750.
If your first home was worth more than £425,000 you would then have to pay 5% stamp duty on the value of the property above the £425,000 threshold. For example, if you bought a property worth £500,000 you would only pay 5% on £75,000 totalling £3750.
Do note however the stamp duty is set to change again in April 2025 according to the government’s autumn 2022 budget.
What do I need to do?
We would always advise all clients to ensure they obtain early advice from a solicitor to ensure they are eligible for the exemption. It is a lot better to know early on than to be told you have to find another £8000 to pay.
Early advice will allow you to assess your options and help you avoid any expensive surprises down the road.
For more advice on this matter, you can contact our Conveyancing team on 01282 422711.
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