The abolition of stamp duty land tax for first time buyers, announced in the Budget, came into effect for house purchase completions on or after 22 November 2017.
That sounds like good news, but there are conditions attached.
You only avoid stamp duty completely if you are paying £300,000 or less for your first home. If you pay between £300,000 and £500,000 you have to pay stamp duty at 5% on the difference between the purchase price and £300,000. You will still pay less, however, than someone who is not a first time buyer. If you pay more than £500,000 then you get no benefit at all and pay the full rate of stamp duty like everybody else.
The rules about who qualifies as a “first-time buyer” are not straight forward.
If you a single person buying just in your name and you do not own or part own another house or flat, then you are a first time buyer.
If you are buying as a couple, it is more complicated.
If you are not married or in a civil partnership, and neither of you owns or part owns another house or flat, you are first time buyers. But if one of you owns or part owns another house or flat then you are not first time buyers and you will also have to pay the 3% surcharge on second properties. You could avoid this by buying in the sole name of the one who does not own another house – if your mortgage lender is willing to lend to just one of you. The reality is that most couples need both incomes to obtain the mortgage they need, so buying in just one name will rarely be an option.
It becomes more difficult if you are married or in a civil partnership. You are not first time buyers if one of you owns another house, but married couples and civil partners cannot get round it by buying in the other spouse / partner’s name.
This is a brief summary of the new rules and you should always discuss your own situation with your conveyancing lawyer.