Budget 2010 – Stamp Duty changes
Whilst I am slightly loathe to post a pre-budget rumour this one is sufficiently headline grabbing to warrant some attention.
The BBC have reported that Chancellor Alistair Darling is to announce in the Budget that stamp duty will be scrapped on house purchases up to £250,000 for first-time buyers.
Why the Treasury would drip feed info like this when there is going to be a Budget in a couple of hours, I don’t know.
Update
The Chancellor has confirmed that this measure will be implemented plus stamp duty is incresing to 5% on properties over £1m.
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Do you know when this will come into effect?I think this comment should be removed
The SDLT holiday comes into effect for purchases with an effective date tomorrow. Which means that it affects purchases that complete, or where the purcahsers take occupation or pay most of the price from midnight tonight.
The other measure – 5% for £1m plus is from next year.
There are quite strict rules about who is a first time buyer so you need to check these to make sure you fall within this. If you need help please speak to someone in our residential property team.
ShimonI think this comment should be removed
Do you have any idea what the rate the stamp duty would be on a first time buyer purchase over £250,000?I think this comment should be removed
Unfortunately there is no let up for first time buyers over this amount so the normal rates will apply – 3% or 4% depending if the consideration is above or below £500k.I think this comment should be removed
I have just bought my first property with completion date 15 March. Is there any ways that I still take advantage of the stamp duty holiday?I think this comment should be removed
I am really sorry but no. The cut off date is midnight on budget day – if you completed earlier than that you won’t benefit from this relief.
Congratulations though on buying your new home!I think this comment should be removed
The 5% comes into effect next year – when is that? Next tax year ie April 2010 or April 2011?I think this comment should be removed
Im a first time buyer but i am getting a joint mortgage with my dad, who is not a first time buyer. do i miss out on this deal? im due to complete on the 31st of this month? the flat im buying is 200k. so potentionally 2k i could save.I think this comment should be removed
Colin – it comes in from 6 April 2011.
Adam – it seems to me that it will depend on exactly how you structure the purchase. E.g. will your father have be on the title or will be only be giving a personal guarantee on the mortgage. If he will be on the title then under the current info we have – you won’t qualify. There might be some clever ways to get around this – I know there has been a bit of a debate about people providing funding and then later being added to the title. Whether you can do that is very much subject to your bank’s approval.
There has been some talk of the Treasury tightening up the provisions so I would continue to monitor this issue.
I will continue to blog on this subject so I suggest checking here again.I think this comment should be removed
This is very annoying, I just completed 10 days ago, would have waited just 10 days to save thousands….
Btw, when is this stamp duty holiday until? i.e. the end date for it?I think this comment should be removed
My son is in the process of buying his first house and he has not received the final paperwork yet for signing – this could be any day now. So under the new regualatons he will not have to pay stamp duty – He spoke to the estate agent (as as per usual the solicitors never answers the phone) and they said that he would have to pay it THEN CLAIM IT BACK! Surely not – it is the solicitors duty to sort this out before they send him the final paperwork with the correct fee’s entered – is it not? and surely the solicitor should have the curtesy to inform him on this matter with a simple phone call as he can never get any answer from them – what do you think?I think this comment should be removed
What is the detailed criteria to qualify for the first time buyer? as mentioned above, it is quite strict…
Also, the end date would be useful as my sister is thinking about buying one as well.I think this comment should be removed
Cathy – it ends in two years time – i.e. the stamp duty trigger day muxt be before 25 March 2012.
The criteria are quite detailed but the main point is that if you have ever owned or jointly owned a freehold or lease (over 21 years) anywhere in the world you won’t be a first time buyer.
If you would like to discuss this please give me a call tomorrow or try one of my colleagues in our residential property team.I think this comment should be removed
Dear Sandra
I apologise on behalf of my profession! If it means anything to you, most converyancing lawyers I know have been innundated with calls today on this subject. Lets see if I can help.
First point – the estate agent was wrong – you either pay the stamp duty or not – depending on whether you qualify. No reclaiming it. The “holiday” is technically a relief and under stamp duty law, this is claimed when the form is sent in. If the solicitor gets it wrong then they might need to reclaim.
Second point – stamp duty is a tax on the purchaser. Whilst your solicitor will probably complete the forms it is up to the purcahser to ensure that they are right. Same as when you fill in an income tax return. Your solicitor should give you the opportunity to dicuss it. If they don’t then you have not had good service from them. Although it does sound like you are having service problems with your son’s solicitors! Most solicitors are not tax experts so I would give them a bit of time to digest the new holiday – it is hard enough for those of us who do specialise in it!
I hope that this is helpful and if you have any more questions please feel free to post them here or give me a call.
ShimonI think this comment should be removed
Dear Shimon,
I would like to know about the process of not paying the stamp duty. We are the first time buyers and we have never had any properties (neither in the UK or abroad). The price of the property qualifies us not to pay stamp duty. At the moment we are ready to exchange contracts and our solicitor said that she is going to send us documents that we have to sign and she will send to Inland Revenue. My question is how long it is going to take to arrange the whole paper work with the Inland Revenue. Are they going to take long time to process the documents?We are in rush to move in and we are not sure if the Inland Revenue will request more documents (which would prolong the whole process) like our mortgage offer, payslips, deposit proof, searcher for the house ect or it would be done automatically without messing around with other documents. Can you advise on the process and what is the best way to deall with it if it takes long time?I asked our solicitor, but she did not seem to be very helpful.
Kind Regards,
AdriannaI think this comment should be removed
Dear Adrianna
It depends on your solicitors. The actual relief is simply claimed by completing a box on the stamp duty land tax return so that shouldn’t take any time at all.
In terms of sorting out the paperwork generally, this will depend on how your solicitor is set up to file the return. Here we do it electronically and one submits the return and get a receipt on the same day. If they do the same you will be able to plod on with registering your purchase straight away.
We have no way of knowing what follow up questions the stamp office will ask after the event but there is no reason why it should impact on your purchase and registration.
That said, your solicitor might have questions they want to ask you to verify that you really are first time buyers – but that is up to them.
ShimonI think this comment should be removed