First Time Buyer Stamp Duty

publication date: Feb 17, 2011
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

First Time Buyer Stamp Duty

Stamp duty is a tax that buyers have to pay to the government when they purchase a home. Recently for first time buyers, there was some good news on the stamp duty front. From 25th March 2010 to 25th March 2012 as a first time buyer paying stamp duty, you are exempt if you buy a property under £250,000. As the average first time buyer buys a property for £138,000* (source CML) this should mean most, if not all, first time buyers pay no stamp duty at all.

Normally any properties from £125,001 to £250,000 will pay 1% stamp duty. So for a property worth £138,000, buyers would normally pay £1,380.

Stamp duty is normally paid when you ‘complete’ on a property purchase. So to avoid paying stamp duty as a first time buyer on all properties up to £250,000, you will need to not just have made an offer, but also exchanged and completed (ie moved in) by 25th March 2012 to be exempt from paying any stamp duty.

Remember there are other costs that you will incur such as first time buyer mortgage fees to organise your mortgage or ‘reserve’ the money you borrowed. You will also need to pay your legal company up to £250 up front and if buying a flat a further £100 to cover the more expensive legals. The rest of the money you will pay on completion, ie the day that you move in.

Finally don’t forget to make sure you have enough money for all the costs incurred during your move – and indeed the running and maintenance costs when you own the property.


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