First time buyers are benefiting from the tax relief that means they don’t have to pay stamp duty on their home provided it is not more than £300,000. More than 180,500 first time buyers have pocketed the cash they would have spent on Stamp Duty Land Tax (SDLT) for their new homes, according to HMRC.
The tax relief, known as First Time Buyers Relief (FTBR), was introduced on 22 November 2017 and in its first year the estimated total amount saved by buyers is more than £426 million.
The relief applies to purchases of residential property up to £500,000, provided the purchaser intends to occupy the property as their only or main residence. Where the purchase price is over £300,000 but does not exceed £500,000 first time buyers will pay 5% on the amount above £300,000. For example, a property purchased for £450,000 would pay £7,500 SDLT (5% of £150,000). This gives a saving of up to £5,000 for each first-time buyer.
In last month’s Budget, the relief was extended to first time buyers purchasing through approved shared ownership schemes who choose to pay SDLT in stages, rather than on the market value of the property. This has been retrospectively applied to eligible property transactions since last November.
The relief was claimed in more than 58,800 transactions between July and September this year, an increase of 12% compared to the previous quarter.
The relief applies only to purchases in England and Northern Ireland, SDLT is devolved in Scotland and Wales. There is no stamp duty to pay on property valued at under £125,000.
Mel Stride MP, Financial Secretary to the Treasury, said: “These statistics show that the Government was right to offer a helping hand to first time buyers. Without this investment, more than 180,500 new homeowners may have struggled to get onto the property ladder. Maintaining the status quo was not an option.”