Stamp duty for first time buyers 2020: Do first-time buyers pay stamp duty?

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In Scotland, Stamp Duty is called Land and Buildings Transaction Tax, while in Wales it is referred to as Land Transaction Tax if the sale was completed before April 2018. Stamp duty is paid when you buy a; freehold property; new or existing leasehold; shared ownership scheme; transferred land or property in exchange for payment, for example, if you take on a mortgage or buy a share in a house.

Do first-time buyers pay stamp duty?

The UK is in the middle of a stamp duty cut introduced by the Government, which will span until March 31, 2021.

This means any property bought which costs less than £500,000 will not have any stamp duty requirements placed upon it.

There is also a partial stamp duty exemption for first-time buyers outside of the holiday period.

First-time buyers who buy a home costing less than £300,000 will not need to pay stamp duty.

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As the average property in the UK costs less than £300,000, most first time buyers won’t have to pay stamp duty at all.

If a first-time buyer wants to buy property or land costing upwards of the threshold, they will only have to pay stamp duty on the sum in excess of £300,000.

However, this rule only applies as long as the property costs less than £500,000.

If it’s more than £500,000, the full stamp duty tax will need to be paid.

You qualify as a first-time buyer if you:

  • Have never owned a property – this includes overseas properties or any home you may have inherited
  • The property you were buying is your only and main residence – you cannot get stamp duty relief if you are purchasing a buy-to-let

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In addition, if you’re buying a house with someone else, like your spouse, civil partner or even a friend, you can’t get the stamp duty relief unless you’re both first-time buyers.

This is also true if you’re buying a property with a parent.

To put it simply, if anyone on the deeds have currently or previously owned a property, the full stamp duty will apply.

If you have to pay stamp duty, you must send a Stamp Duty Land Tax return to HMRC and pay the money due within 14 days of completion.

If you have a solicitor, agent or conveyancer, they will usually file the return and pay the tax on your behalf on the day of completion.

The money will be added on to their fees for you to reimburse at a later date.

They will also claim any relief you qualify for, including if you’re a first-time buyer.

If solicitors or anyone else fails to do this for you, you can file a return and pay the tax to HMRC yourself.

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