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First Time Buyer Relief Ends Soon! | Stamp Duty Land Tax Guide
Currently, first time buyers are exempt from paying stamp duty land tax (SDLT) on property up to £250,000. However, this will shortly end on 24th March 2012 and stamp duty will have to be paid on all purchases above £125,001.
At In-Deed we receive a number of enquiries from first time buyers confused about what they have to do to make sure they are applicable for this relief and when applications need to be submitted by. Therfore, the following article aims to answer all the questions you may be asking.
Your application for stamp duty land tax is submitted towards the end of the conveyancing process.
Because the average conveyancing transaction takes between 8 to 10 weeks and the deadline is only 7 and a half weeks away you need to put in an offer on a property and instruct a solicitor asap!
But do not panic! At In-Deed we would expect you, as a first time buyer, to complete the process faster as you are at the beginning of the chain. But it is important you get everything moving along quickly, so we recommend not delaying any longer!
- Get your mortgage offer in place – Lenders dithering over mortgage offers can potentially add weeks to the conveyancing process
- Instruct your solicitor now - there is a lot of preliminary paperwork you and your lawyer can complete in advance. Your lawyer will also be able to get everything place and let other involved parties know.
- Use a solicitor with an online service – We have found our online system can cut a couple of weeks off of the conveyancing process by speeding up communication and saving on postal delays.
- Be proactive - Complete paperwork as fast as possible. Make sure the estate agent is pushing things along with the vendor. If appropriate form a relationship with the vendor so they are aware of how important this is.
The first time buyer relief for properties up to £250,000 ends on 25th March 2012. It has been confirmed that this date will not be extended.
First time buyers do not have to pay stamp duty on properties up to £250,000. Other purchasers of property between £125,001 and £250,000 pay stamp duties of 1%. For first time buyers this means a saving of £1,250 - £2,500.
To qualify as a first time buyer you must:
- Never have owned a house or flat in the UK or anywhere else in the world.
- If you are buying with someone else they must also have never owned another property.
The table below shows the amount of Stamp Duty Land Tax (SDLT) currently charged on property in the UK.
|Purchase price of residential property||Rate of SDLT (percentage of total purchase price)|
|£0 - £125,000||0%|
|£125,001 - £250,000||1%|
|£250,001 - £500,000||3%|
|£500,001 - £1 million||4%|
|£1 million or more||5%|
If this article does not answer your stamp duty questions then please do not hesitate to call a member of the In-Deed team on 0330 100 2322 to receive free legal help!