The document summarizes changes to the Stamp Duty Land Tax (SDLT) announced in the UK Autumn Budget of 2017. Specifically: 1) SDLT rates for first-time home buyers purchasing properties worth up to £300,000 will be abolished, and the tax will also be abolished on the first £300,000 of purchases between £300,000-£500,000. 2) To qualify for the lower SDLT rates, buyers must be first-time buyers who have not owned property anywhere in the world previously. 3) Transactions that exchanged contracts before November 22nd but complete afterwards will qualify for the new rates.

1. Autumn Budget Announcement Changes to Stamp Duty Land Tax
Stamp duty land tax (SDLT) replaced stamp duty in 2003 and
is a tax charged on 'land transactions' (and no longer a tax on
documents). SDLT is payable on the purchase or transfer of property
or land in the UK where the amount paid is above a certain threshold.
On Wednesday 22 November 2017 Chancellor Philip Hammond
announced that SDLT for first-time buyers on
purchases of up to £300,000and on the first £300,000
of purchases up to £500,000 would be abolished with immediate effect.
This is great news for first-time buyers purchasing a home that costs up to £500,000. On a home costing
less than £300,000 they will pay no SDLT and on a home costing less than £500,000 they
will pay no tax up to £300,000 and 5% on the portion of the purchase price between £300,000.01 to £500,000.
Those buying a first home costing more than £500,000 won't benefit from any change and will be buying under
the standard system.
It is necessary to qualify as a first-time buyer to benefit from the change. A first time buyer is anyone who
hasn't owned a property before anywhere in the world, whether bought or inherited and who is
buying a property to be used as their main residence. If
the property is being purchased jointly both buyers need
to be first-time buyers. A first purchase won't
qualify for the discounted rates if it is
a buy to let.
The requirement to pay SDLT is triggered on completion
of the purchase of the property so even transactions that
exchanged prior to 22 November are covered as long as
completion did not taken place prior to that date.
The maximum SDLT saving to be made under the new system, compared with standard rates, is £5,000
which can be saved when buying a property costing between £300,000 and £500,000.
The Office for Budget Responsibility expects this measure to result in an increase in property prices, which could
wipe out gains from lower SDLT payments. Estate agents we have spoken to have informed us that since the
Autumn Budget announcement many first time buyers are now filtering the viewings of properties they are going
to with the £500,000 limit in mind.
Helena Camacho Shaw
Nabas International Lawyers
(a trading name of Cubism Law)