UK stamp duty fisrt time

Stamp Duty Holiday for First Time Buyers

First time buyers do not have to pay stamp duty for purchases less than £250,000

This "tax holiday" started from March 25th 2010 and - at the time of writing - will run for 2 years.

Property deals completing after March 25th are eligible

Anyone who has ever owned or had a share in a property - any where in the world - is not eligible.

A parent buying a property for their child - the parent having owned property before and the child not - would not be eligible (There may be some ways around this sing a guarantor mortgage but you would need to check with a mortgage broker.

A couple, or a group of friends etc, who are buying a house together- where one of the partners has owned property before - could put the house in the name of the first time buyer only and thereby save on the stamp duty charge

Buyers will have to sign a tax return at the time of purchase stating that they are claiming the first time buyers relief from Stamp Duty.

Apportioning Stamp Duty

It’s important to keep the stamp duty bands in mind when you agree a purchase price for a property.

Buy for £125,000 and there’s no tax due, but pay £125,001, and you’ll face a bill for £1,250.01.

There’s an even more painful jump if your property costs just above the £250,000 barrier.

Pay exactly £250,000, and you’ll be charged £2,500. Pay £250,001 and this leaps £5,000 (and some loose change) to £7,500.03.

When the price of a property is just above the £125,000, £250,000 or £500,000 threshold, ‘apportioning’ is often used to push it back into a lower stamp duty bracket.

The purchaser and seller agree a price that falls just below the threshold, but the purchaser undertakes to pay an additional sum for ‘fixtures and fittings’ – which could include things like curtains, carpets or white goods – taking the total price to a level the seller is happy with.

But be warned: Revenue & Customs checks a proportion of these transactions and will challenge any that arouse its suspicions.

So if you come to an apportioning deal, make sure you can prove the sum involved was realistic – and that the transaction actually took place – or the Revenue could come after you for unpaid tax.

Remember, tax evasion is a serious matter and in extreme cases can lead to a prison sentence.

To read more on this subject please see the list below or your mortgage guide or your home buying guide

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Value of Property	£
		(eg 125000)

Borrow How Much?	£
		(eg 92500)

Your Mortgage Type

First time buyer?		Yes No
Have you found property?		Yes No
Country
Bad Credit History?		Yes No

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