{"id":3733,"date":"2018-11-07T12:07:29","date_gmt":"2018-11-07T12:07:29","guid":{"rendered":"https:\/\/rrpassociates.co.uk\/?p=3733"},"modified":"2018-11-07T12:22:05","modified_gmt":"2018-11-07T12:22:05","slug":"stamp-duty-and-the-autumn-budget","status":"publish","type":"post","link":"https:\/\/rrpassociates.co.uk\/residential-property\/stamp-duty-and-the-autumn-budget\/","title":{"rendered":"Stamp Duty and the Autumn Budget"},"content":{"rendered":"

Changes to Stamp Duty Land Tax (SDTL) Relief following the Autumn 2018 Budget.<\/strong><\/p>\n

On Monday, 29th October, the Chancellor Phillip Hammond, announced changes to the current SDLT regime. The new measures will apply to individuals who fall within the \u201cfirst-time buyers\u201d category purchasing shared ownership homes valued up to \u00a3500,000.<\/p>\n

Who are \u201cfirst time buyers\u201d?<\/strong><\/p>\n

First time buyers are persons who have never owned a freehold\u00a0 or leasehold interest of more than 21 years in a property\u00a0 and wish to purchase a property for the first time to use as their only or main residence. It is worth noting that you will not be a \u00a0first time buyer if you have owned any property at any time anywhere in the world. It is also important to remember that anyone who previously purchased a property for the purpose of renting it out, for example, and \u00a0does not occupy the property themselves,\u00a0 will not enjoy the first time buyer\u2019s SDLT relief.<\/p>\n

What is \u201cshared ownership\u201d?<\/strong><\/p>\n

With the average house prices in Bedfordshire reaching \u00a0\u00a3317,000.00 for many people, and especially the younger generation, \u00a0the dream of owning a house appears increasingly more distant. Shared Ownership is a way of helping individuals to get onto the property ladder. It provides first time buyers with the opportunity to purchase a distinctive share in a new build property. The purchaser pays a mortgage on the share they own, and pays rent to a housing association on the remaining share. The purchaser then \u00a0has the option to increase his share during their time in the property via a process known as \u2018staircasing\u2019, and, in most cases, they can staircase all the way to 100%, thereby owning the property outright. It is important to note that shared ownership properties are always leasehold.<\/p>\n

What are the latest changes to SDLT?<\/strong><\/p>\n

Since 22nd November 2017 first time buyers purchasing their first home for \u00a3300,000 or less have been exempt from paying SDLT. Where the purchase price is over \u00a3300,000 but does not exceed \u00a3500,000 a first time buyer would pay 5% on the amount above \u00a3300,000. Below is an illustration of SDLT calculation in case of an individual purchasing his or her first home for \u00a3350,000.<\/p>\n

First \u00a3300,000 x 0% = \u00a30.00<\/p>\n

\u00a350,000 x 5% = \u00a32,500 (SDLT payable)<\/p>\n

From 29 October 2018 the above relief has been extended to include first time buyers purchasing through approved shared ownership schemes and who do not elect to pay SDLT on the market value of the property but instead choose to pay SDLT in stages.<\/p>\n

For avoidance of doubt, the SDLT relief for first-time buyers purchasing through approved shared ownership schemes will not be available on any part of the purchase price if the value of the property is above \u00a3500,000.<\/p>\n

It is \u00a0also important to note that \u00a0relief will be backdated to 22 November 2017 so that buyers of qualifying shared ownership property acquired since 22 November 2017 can claim an SDLT refund by amending their SDLT return. The relief will apply to purchases in England, Wales (but only until April 1st 2018) and Northern Ireland.<\/p>\n

One final point to make is that the relief would still apply where a person\u2019s spouse or civil partner owns a property, but the first time buyer does not \u2013 provided the spouse or civil partner is not named on the title of the property. However, the current SDLT position is quite different, in relation to the purchases of additional properties, where the buyer\u2019s \u00a0spouse or civil partner is treated as a joint purchaser when buying the property, \u00a0for SDLT reasons, even if they are not going to be party to \u00a0the title.<\/p>\n

The extension of the First Time Buyer relief will see a welcome change for those people who are purchasing a share in a property with a full market value over \u00a3300,000, as they will also be able to share in the SDLT relief.\u00a0 However this is the extent of the people who will benefit from the increase in the relief because anyone purchasing a property with a full market value of less than \u00a3300,000 would be in a position to elect to pay SDLT on the full market value and take the benefit of the relief. Mindful of the fact that not many first time buyers who elect to enter the property ladder via the shared ownership schemes are in a position to buy a share in a property with a full market value over \u00a3300,000, the scope of the newly introduced relief is likely to be limited.<\/p>\n

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Changes to Stamp Duty Land Tax (SDTL) Relief following the Autumn 2018 Budget. On Monday, 29th October, the Chancellor Phillip Hammond, announced changes to the current SDLT regime. The new measures will apply to individuals who fall within the \u201cfirst-time buyers\u201d category purchasing shared ownership homes valued up to \u00a3500,000. Who are \u201cfirst time buyers\u201d?…<\/p>\n","protected":false},"author":4,"featured_media":3735,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[44],"tags":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\n