Stamp duty land tax relief for first-time buyers

22nd November, 2017

The Chancellor announced a relief from stamp duty land tax (SDLT) for first time buyers to apply for purchases from 22 November 2017. Where conditions are met, there will be no SDLT on the first £300,000 of the purchase price. A rate of 5% will apply to the excess.

Broadly, the relief applies to:

  • Purchases of a single dwelling
  • Where the purchase price is £500,000 or less
  • Individual purchases only (not companies)
  • Each purchaser must be a first time buyer
  • Each purchaser must intend to occupy the dwelling as their only or main residence
  • Does not apply to non-residential or mixed use properties
  • The relief must be claimed on a land transaction return

The relief will only apply to purchases in England, Wales and Northern Ireland. In Wales, it will apply until land transactions tax replaces SDLT for transactions in Wales from 1 April 2018. The Scottish Government’s land and buildings transaction tax came into force on 1 April 2015, replacing SDLT for land transactions in Scotland.

SDLT additional rate anti-avoidance

Amendments will also be made to prevent a perceived abuse of the replacement of main residence relief to require the purchaser to dispose of the whole of their former main residence (rather than fractional shares, as is currently allowed) and to ensure that a qualifying disposal is to someone who is not their spouse.

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