It was a marvellous day for first-time homebuyers in the UK when the government announced in 2017 that they would not have to pay stamp duty tax. This is if the value of the property they are planning to buy does not exceed £300,000.
Also, they could enjoy further relief in more costly locations like London if the property is not more than £500,000. For many first-time buyers, the stamp duty tax is one of the largest add-on purchase costs, so a tax break like this is most welcome.
But what or who exactly are these first-time homebuyers?
The First-Time Homebuyer Defined
You could qualify as a first-time homebuyer if you have never owned a home, whether jointly with someone else or on your own, anywhere in the world; have an entitled residential status; and are planning on purchasing property with your entitled civil partner or spouse.
Being a first-time buyer is crucial because you could obtain specific perks that could help you in securing a great property. For one, the waived stamp duty tax if you buy property that does not exceed £300,000 or £500,000 in more expensive places.
You will likewise pay a lower land transaction tax rate if you are purchasing “share transfer” property. You could also opt to buy a house on special first-time homebuyer developments, which are only available to first-time homebuyers.
Also, you could qualify for the “affordable housing purchase scheme” if you are looking for a more affordable housing option.
Some Crucial Things to Note
You are required under law to declare that you have never owned property in the UK or anywhere else in the world, as well as submit a special code with your stamp duty return following your property purchase.
Depending on your specific circumstances, you could be deemed a first-time homebuyer even if you are already a property owner.
Lastly, if you are looking to buy property with someone else, that individual must also be a first-time homebuyer to benefit from the waived stamp duty tax.