No Stamp Duty for First Time Buyers up to £250,000 – How much of a benefit is this?
Before the recent announcement that Alistair Darling made that First Time Buyers would pay no Stamp Duty on house purchases up to £250,000, previously, up until 31st December 2009, all buyers purchasing between £175,000 to £250,000 would have been subject to a 1% Stamp Duty tax. This could cost them as much as £2,500 on top of the other house buying costs, if they were buying at a figure of £250,000.
With the recent announcement, First Time Buyers will no longer be subject to any Stamp Duty unless they buy a property in excess of £250,000, until 25th March 2012. But before you rush out to buy your new home, expecting to save on Stamp Duty beware of a few of the pitfalls!
1. According to the treasury a first-time buyer is classed as someone who has not previously owned a property anywhere in the world. This means that if you have been on the deeds of a property, whether on your own or with a partner and anywhere in the world – you are not classified as a First Time Buyer and therefore aren't eligible for the stamp duty holiday.
2. If you are buying a property with a partner who is not a First Time Buyer but you are, the Treasuries definition above, again precludes you from taking advantage of the Nil band Stamp Duty offered to First Time Buyers.
3. If you of your partner have part owned a property, once again, you will be unable to benefit from the stamp duty exemption for First Time Buyers either.
This said, it is great news for First Time Buyers who satisfy the Revenue’s requirements, as you could save a huge £2,500, which will give you additional money to put aside for a rainy day or help with some of the costs in setting up your first home. To ensure that you qualify for Stamp Duty exemption, your solicitor will ask you to complete a form which details your previous dwellings and the occupancy status that you had, to confirm that you are a First Time Buyer.
If you are a First Time Buyer but will need to rely on someone else’s income to satisfy the lender of your ability to service the mortgage, it may be worth considering the guarantor option. This may get over the issue, without requiring your guarantor to be on the deeds of the property and as a result they are not buying it and you can retain the status of a First Time Buyer
If you would like any more information on this subject or general advice about mortgages or moving home please visit Alpha Independent Mortgage’s website – www.alphaim.co.uk or call Guy Applebee on 0844 5008300
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