I'm confused. Is the new Stamp Duty threshold of £250,000 good news?
ASK THE EXPERT.
That rather depends. Unlike the previous Stamp Duty holiday, for example, which came to an end last December and which temporarily applied to all purchases up to £175,000, this one is specifically designed to benefit first time buyers only. So, while it will do little or nothing for the housing market as a whole, it is certainly good news for first time buyers, since it could save them as much as £2,500. Everyone else, meanwhile, will remain liable to pay Stamp Duty at the usual rate, which basically means 1% of the value on properties priced between £125,001 and £250.000. However, as you might expect, things aren’t quite that simple. Why? Well, because everything hinges on whether you fit Alistair Darling’s strict new definition of a first time buyer. To be eligible, you must be someone who has never, ever possessed a freehold or leasehold interest in any residential property - either in the UK or anywhere else. So, if you inherited your current home, rather than buying it…you don’t qualify. If you used to own a property but sold up years ago to work abroad…ditto. Divorcees who once co-owned the marital home but are now buying on their own need not apply. Likewise anyone who has moved to Britain after owning their own home abroad. Nor does it stop there. If two or more people are buying jointly, then both or all of them have to fit this new definition in order to qualify. So, if you have never owned a property before, but your partner has…then tough luck. How will HM Revenue and Customs know if you’re a genuine first time buyer? Basically, you’ll have to sign a formal declaration to that effect. And if that sounds like it’s worth taking the risk, just remember that the authorities can check up on you for the next 6 years! The new threshold also only applies if you are buying a property for your own personal use – so, all buy-to-let purchases are explicitly excluded, as are those made on behalf of someone else.