As from the 29th October 2018, first-time buyers in shared-ownership homes will not have to pay stamp duty on the first £300,000 when buying a property with a purchase value up to £500,000.
Only valid for first-time purchasers in England and Northern Ireland, the new charge is being backdated to include properties bought after the 22 November 2017 budget, in which all other first time buyers were able to avoid paying SDLT on the first £300,000, but those purchasing shared-ownership properties were excluded from the relief.
A first time buyer is classified as one who has never owned a property anywhere in the world, and stamp duty land tax is payable on homes valued at £300,000.01 or more. Stamp duty then applies for anything over this level and the amount is determined by the property price.
However, the stamp duty relief is only valid for properties purchased up to the value of £500,000 and should the property cost be higher, the property will then need to be purchased under the standard system, regardless of any first-time buyer status.
In addition, although the shared ownership scheme is for non-homeowners who are sole or joint purchasers and is irrespective of whether they have owned a residence in the past, providing their joint income does not exceed £80,000 a year (£90,000 in London); the stamp duty relief is only valid in shared ownership situations, if both parties are first-time buyers.
The new stamp duty rates for first-time buyers purchasing shared-ownership properties costing up to £500,000 are as follows:
0% stamp duty up to the £300,000 purchase price
5% stamp duty on £300,000.01 to £500,000 purchase price (on that portion of the purchase price only)
Stamp duty refunds must be claimed within four years of buying the property and an application needs to be made to the Stamp Duty Land Tax Office in order to do so.