Tax & Accounting News

Exemptions to the Stamp Duty nil rate band

26/04/2010

In an effort to revive the housing market, the chancellor, Alistair Darling, announced in the last Budget that the Stamp Duty threshold would be doubled, from £125,000 to £250,000, for first-time buyers.

However, while that may indeed prove useful for those looking to buy their first home, it is important to bear in mind that there are some significant exemptions to this rule.

The main restrictions are that the purchase must be made on or after 25 March 2010 and before 25 March 2012, the property must be the purchaser’s main residence and it must be the first residential property that the purchasers have owned.

Crucially, if there is more than one buyer, all of them must be first-time buyers in order to take advantage of the higher threshold. If, for example, a couple are buying and one is a first-time buyer and one is not, the only way to avoid the stamp duty would be to buy it entirely in the first-time buyer’s name – the other buyer could then purchase a share in the property at a later date.

The new limit also does not apply to commercial property under any circumstances, including mixed use properties. Here the limit remains £150,000, even for first-time buyers.

For more information on Stamp Duty please contact us.