From March 2010, the threshold for stamp duty land tax for first time buyers was amended to be in the buyer’s favour. First time buyers no longer had to pay stamp duty land tax for properties purchased at £250,000 or below on completion of the transaction.
However, the first time buyers stamp duty land tax relief will come to an end on 24 March 2012 and any purchase transactions completed after this date, where the purchase price is over £125,000 will be subject to stamp duty land tax at the relevant percentage rate.
At present, the stamp duty land tax rates and thresholds are as below :
Residential land or property SDLT rates and thresholds
| Purchase price/lease premium or transfer value | SDLT rate | SDLT rate for first-time buyers |
| Up to £125,000 | Zero | Zero |
| Over £125,000 to £250,000 | 1% | Zero |
| Over £250,000 to £500,000 | 3% | 3% |
| Over £500,000 to £1 million | 4% | 4% |
| Over £1 million | 5% | 5% |
Therefore, if you are buying a property for £190,000.00 and you are a first time buyer, if the transaction is completed before 24 March 2012, the stamp duty land tax payable on completion will be zero, but if you complete the transaction after 24 March 2012 the stamp duty land tax payable on completion will be £1,900.00, equal to 1% of the purchase
price.
There is no indication from the Government at this stage that they will extend the time period for first time buyers stamp duty relief so it must be taken that the current relief will cease in March.
Therefore, first time buyers of properties over £125,000 and less than £250,000 may benefit from the stamp duty land tax relief on their property purchase, if they complete before 24 March 2012.
For further information, please contact our Residential Property team on 01244 305910.
