By Philippa Rudd, a partner at Cozens-Hardy solicitors in Norwich
If you are buying a house for more than £1 million then the tax will be 5% of the total purchase price, if the purchase completes on or after 6 April 2011. In the meantime the rate remains at 4% for properties with prices over £500,000. Otherwise the thresholds remain the same, unless you are a first time buyer.
Well, our budget is much less than £1 million! Will we have to pay stamp duty?You will not have to pay stamp
duty if the price of the property does not exceed £250,000 and completion takes place on or after 25 March 2010 and before 25 March 2012 and the property is to be used as your home and you are first time buyers. Otherwise, the existing threshold of £125,000 still applies; if the price is higher than that, the rate of tax will be 1% for properties priced up to £250,000 and then the rate is 3% for properties priced over that amount and up to and including £500,000.
What is a ‘first time buyer’?A first time buyer is a person who has not acquired a freehold or leasehold interest in residential property in the UK (except a lease with less than 21 years to run) or an equivalent anywhere in the world.
I previously bought a house jointly with a former partner. We have since split up and sold the house. Can I claim to be a first time buyer now with my new partner?No, where you previously have owned a property jointly then you cannot now be a first time buyer. All of the buyers, where there is more than one, must be first time buyers.
What if, in the past, one of us inherited a share in a property – would we still be first time buyers?
No, as you would in the past have acquired a major
interest in a residential property.
Can the relief be claimed if I am buying on behalf of my parents?No, as the property must be used as your only or main residence.