Amid all the gloomy talk about the cost of borrowing, the withdrawal of cheap mortgage deals, and the general state of the economy, we should remember that even in times of recession there are always people who need to buy and sell property. There may be many reasons for this – the death of a relative and the disposal of assets in their will, the need to re-locate for work, moving to be closer to family, retirement and downsizing of the family home, or emigrating or returning to the UK from a period abroad. Even in an economic downturn developers continue to build new homes and governments continue to press for additional affordable properties to come to the market. While they may be fewer in number than during the busier times there are still mortgage deals around for first time buyers.
A quick check of Google shows that property enquiries by first-time buyers remain buoyant, whether it’s to view properties for sale on portals such as Rightmove and Zoopla, or broader searches of the property buying process.
First time buyers will come across unfamiliar terms and procedures and it is essential to do some basic research before buying your first home. As an example, even in these straightened times an average of 1600 people a month search the internet asking: Do first-time buyers pay stamp duty?
The simple answer is that this changes according to government policy, with stamp duty being used to either stimulate or damp down the housing market by lowering or increasing stamp duty tax rates. During the height of the coronavirus crisis for example, the government introduced a stamp duty “holiday” for a specific period in order to prevent a crash in the housing market. Stamp Duty (or Stamp Duty Land Tax to give its’ full title) is a tax payable on all property or land purchases over a certain value. This applies whether the transaction concerns a freehold property or a new or existing leasehold, whether the property is bought through a shared-ownership scheme, or whether land or property is transferred in exchange for payment, such as by way of a mortgage.
In his November statement to the House of Commons, Chancellor Jeremy Hunt re-affirmed the stamp duty cuts announced by his predecessor Kwesi Kwarteng, which will remain in place until March, 2025. During the short-lived premiership of Liz Truss these changes were part of a package of reforms intended to stimulate the UK economy. This means that currently first-time buyers will pay zero stamp duty on the first £425,000 of a property valued at £625,000 or less. This compares with the starting threshold for paying stamp duty of £250,000 for non-first time buyers. The government-run Stamp Duty Land Tax Calculator tells buyers how much they will pay.
Usually your conveyancing solicitor will file an SDLT return to HMRC and pay the tax on your behalf as the purchaser of the property. The payment is normally done on the day of completion, but must be paid within 14 days to avoid penalties.
Bretherton Law have been serving the people of Hertfordshire for over 50 years. Our team of experienced Property Lawyers will ensure that whether you are buying or selling, the conveyancing process will run smoothly and professionally. We offer a same day response promise as well as fixed fee quotes. Bretherton Law are accredited under the Lexcel legal practice and the Law Society’s Conveyancing Quality Scheme. Contact us on 01727 869293 or use the contact form on this page.
For more information see: Residential Stamp Duty Rates
