Stamp duty land tax (SDLT) is payable at rates ranging from 2% to 12% when you buy a residential property for £125,000 or more. Higher rates apply to the purchase of second homes and property acquisitions by companies.
If a residential property worth up to £500,000 is purchased by one or more first-time buyers, the first £300,000 of the purchase price is exempt from SDLT. This exemption applies for property purchases completed on and after 22 November 2017.
Many younger people buy their first home through a shared ownership scheme. In such cases the buyer can choose whether to pay SDLT on the entire market value of the property or only on the share of the property they have acquired. If they elected to pay the tax on the full market value they could claim the exemption from SDLT, otherwise the exemption for first-time buyers did not apply.
The law will be changed to allow the exemption for firsttime buyers to apply even where they elect to pay SDLT only on the initial share acquired, as long as the market value of the whole property is no more than £500,000. This change in the rules will be back-dated to cover acquisitions completed on and after 22 November 2017.
Where excess SDLT has been paid since November 2017 it can be reclaimed by amending the SDLT return before 28 October 2019.
Scotland and Wales impose their own versions of SDLT for properties located in those countries.