Stamp Duty Land Tax is a levy that buyers might have to pay on purchases of their properties or land when their purchase exceeds a specific price. However, there are different rules for buyers who owned a property previously and first time buyers.

Stamp Duty Land Tax for first time property owners



The First Time Buyers Relief on Stamp Duty Land Tax (SDLT) was introduced in November 2017. The introduction of this new relief saw the abolishment of SDLT for first-time buyers making a purchase of up to £300,000. If the purchase is over the £300,000 mark, first-time buyers will be required to pay a 5% rate between the £300,000 and £500.000. The tax relief does not apply on purchases over £500,000.

Stamp Duty Land Tax and nill rate threshold temporary increase for first time buyers.

The limit mentioned above has been temporarily increased by £125,000 to £425,000 for the period from 23 September 2022 – 31 March 2025.

There has also been a corresponding temporary increase, until 31 March 2025, in the nil-rate threshold to £425,000 (£300,000 prior to 23 September 2022) for first-time buyers of properties costing up to £625,000 (£500,000 prior to 23 September 2022). No tax relief is available for first-time buyers spending more than £625,000 on a property.

These increases were initially announced as a permanent increase by the then Chancellor, Kwasi Kwarteng, on 23 September 2022. However, they were made temporary by the current Chancellor Jeremy Hunt, as part of the Autumn Statement measures on 17 November 2022. Legislation contained in the Stamp Duty Land Tax (Reduction) Bill will amend Part 4 of the Finance Act 2003 to legislate for this temporary change.

Who can qualify for the stamp duty land tax relief?

• There are several requirements that must be met in order to qualify for the relief. Here are some of them:
• The relief is only available for those purchasing a house for the first time.
• The purchaser can never have previously owned any share of a property in the UK or worldwide.
• The qualifying criteria are extended to both partners when buying a house jointly.
• SDLT applies in England and Northern Ireland only.

Land transactions in Scotland are subject to the Land and Buildings Transaction Tax (LBTT), and land transactions in Wales are subject to the Welsh Land Transaction Tax (LTT).

Welsh Land Transaction Tax

In Wales, there is no tax relief for first time buyers. In 2018, Land Transaction Tax (LTT) replaced the Stamp Duty Land Tax, meaning that everyone who purchases a property or land in Wales will be subjected to paying tax over a specific threshold.

The current LLT threshold is as follows:

·        £225,000 for residential properties (if you do not own other property)

·        £225,000 for non-residential land and property

Although there is no stamp duty land tax relief in Wales, buyers might be eligible to benefit from other incentives such as relief when buying more than one property, relief when moving property around a group or structure and relief when a property is purchased by a charity.