Chancellor Phillip Hammond announced during the 2018 budget that first time buyers in shared ownership homes will no longer have to pay stamp duty land tax on the first £300,000 of homes that cost up to £500,000.
The scrapping of the stamp duty applies to purchases made by first time buyers in England and Northern Ireland. Wales and Scotland will not benefit from the change.
For properties valued between £300,000 and £500,000, a stamp duty rate of five per cent will apply on the amount above £300,000.
The change has been made retrospectively of the 2017 budget, meaning the relief will apply to any first time buyers who bought a property since 22 November 2017. A refund can be claimed if the property purchased was valued at £500,000 or less.
Previously, it was the case that stamp duty relief for first time buyers of shared ownership properties was limited. The relief would only apply when first time buyers chose to pay the stamp duty on the full market value of the property (the first £300,000 up to £500,000), or on the first share of the property bought. This meant subsequent purchases of the share of the property did not qualify for the stamp duty relief.
However, the latest changes to first time buyer stamp duty means the relief now applies to subsequent share purchases, aligning it with the procedure of purchasing a leasehold or freehold property.
A key aspect to these changes is that for those first time buyers who completed on a shared ownership purchase on or after 22 November 2017 and who did not receive the relief on stamp duty, they can claim this back. However, the claim must be made by 28 November 2019.
Adrian Morley, partner in the property department of Hutchinson Thomas, said:
“The latest amendment to stamp duty charges for shared ownership properties is great news for first time buyers in England and Northern Ireland. It provides greater opportunity to those with financial restrictions to get on the property ladder and gives the same benefit as other first time buyers.
“For those who purchased shared ownership homes prior to the stamp duty changes being announced, it is certainly worth them claiming their funds back. If they chose to pay stamp duty in stages and were not previously eligible for the relief, a claim can be made.”
For expert advice regarding property law, contact Adrian Morley on 01639 640521 or email firstname.lastname@example.org