As a first-time buyer, do I need to pay Stamp Duty?
Taxes, deposits, eligibility checks, it can all be extremely daunting trying to get on the property ladder and then comes the little issue of Stamp Duty.
It has been confusing buyers for as long as time can remember, with many not even knowing it’s a thing until they come to purchase a property.
It’s a question we get asked regularly, so we decided now is the right time to explain a little about stamp duty, and the new scheme that is helping first-time buyers avoid it…
What is Stamp Duty?
Otherwise known as SDLT (Stamp Duty Land Tax), is effectively a tax on the land you are buying in England and Northern Ireland.
Any property worth more than £125,000 (or more than £40,000 for second homes) needs SDLT paying.
Homes in Scotland and Wales don’t fall under SDLT, but there are similar schemes in place, with the Land and Buildings Transaction Tax (LBTT) in Scotland and the Wales Land Transaction Tax (LTT) for Wales.
What is the benefit to first-time buyers then?
It’s not all doom and gloom in government, especially if you’re a first-time buyer.
This means that those looking to get on the property ladder now get SDLT relief, effectively paying nothing.
If your house goes over the £300,000 threshold, then you’ll only pay 5% on the amount over this, up to a maximum property price of £500,000.
Say you’ve found the dream house, but it costs £350,000, all that means is you’ll pay the 5% stamp duty over £300,000, which works out at a favourable £2,500.
Will this help me get my property faster?
Whilst the keys won’t be handed over any quicker due to the lack of Stamp Duty, the saving you make may help in getting on the ladder quicker than expected.
For example, if you had budgeted for SDLT of £5,000 for your property, that is now free money to put towards a bigger deposit, or perhaps being able to improve one of the rooms better than you imagined.
Or, if you were slightly short of raising the required deposit, then you can now find money from elsewhere due to the Stamp Duty savings.
It’s one of the biggest benefits of recent times when being a first-time buyer.
How We Can Help
If you have any more questions on Stamp Duty or are interested in purchasing your first home, then get in touch with Warrington Mortgage Centre through our first-time buyers page and our team of experts will be happy to guide you in the right direction.
We can advise on a range of issues when it comes to housing, from mortgages to Stamp Duty to cashing in those ISAs.
Give us a call on 01925 573328 and we’ll be more than happy to help.