The Chancellor has today responded to calls from Propertymark
to exempt first time buyers in England from paying stamp duty on properties
Those buying a property between £300,000 and £500,000 will not
pay stamp duty on the first £300,000.
Mark Hayward, Chief Executive, NAEA Propertymark said:
"The announcement today from the Government will have a
positive impact on the market. It’s a smart move to ensure the dream of
homeownership for young people can become a reality and will help buyers
across the UK, including London and the South East where property prices are
"We do however need to realise that this move will
increase the demand for first time buyer properties and if we don’t have the
supply it will push prices up. We have seen this in areas where Help to Buy
is offered, as it attracts a great deal of interest from first time buyers.
"In terms of the Government’s plans to build 300,000 new
homes a year, it is yet another pledge to increase the number of new homes
created. While we welcome this news, we have historically had these
announcements from Government to accelerate housebuilding which has not been
delivered. It is not a question of ‘how many’, it’s a question of
While vowing to protect green belt land, other measures
included an announcement that over the next five years the Government will
commit a total of at least £44bn to capital funding, loans and guarantees to
support the housing market - to deliver 300,000 net additional homes a year
on average by the mid 2020s.
Other measures included committing an additional £1.5 billion
to the Home Builders Fund to get SME housebuilders building again. £1.1bn was
committed to unlocking strategic sites while a £630m fund will be introduced
to help unstick the delivery of 40,000 homes at small sites.
£8bn of new financial guarantees to support private
housebuilding and the purpose built private rented sector were announced and
local authorities were given the power to charge 100% council tax premiums on
The Chancellor focused on homelessness, announcing investment
of £28m in three 'housing first' pilots.
HMRC has provided NAEA Propertymark members with a guide to
Relief for first time buyers
A relief for first time buyers of residential properties
costing no more than £500,000. First time buyers will pay no Stamp Duty Land
Tax (SDLT) on the first £300,000 of the purchase price, with the remainder
being charged at 5%. No relief will be available where the total
consideration exceeds £500,000.
The relief is not time limited and will apply to transactions
with an effective date on or after 22 November 2017. Legislation will be
introduced in the Finance Bill 2017 to 2018.
First time buyers can use the gov.co.uk/calculator to work out their STLD
liability. To claim, relief code 32 should be entered at box 1.9 of
SDLT return. If code 32 is entered on the online return, the return will
calculate the tax due, except where the first time buyer is being granted a
new lease. In such cases the gov.uk calculator should be used to work
out the tax due.
Changes to the filing and payment process
Following the announcement at Spring Budget 2017, the SDLT
filing and payment window reduction from 30 days to 14 days would be delayed
until after April 2018. It has been confirmed that the changes will apply to
land transactions with an effective date on or after 1 March 2019.
Improvements are planned to the SDLT return which aim to make compliance with
the new time limit easier. Legislation will be introduced in Finance Bill
2018 to 2019.
Minor amendments to higher rates of SDLT
Minor amendments to provide relief in certain cases including:
- where a divorce related court
order prevents someone from disposing of their interest in a main
- where a spouse or civil
partner buys property from another spouse or civil partner
- where a deputy buys property
for a child subject to the Court of Protection
- where a purchaser adds to
their interest in their current main residence.
Additionally, legislation will be provided to prevent abuse of
relief for replacement of a purchaser’s only or main residence by requiring
the purchaser to dispose of the whole of their former main residence and to
do so to someone who is not their spouse. The changes will apply from 22
November 2017. Legislation will be introduced in Finance Bill 2017 to 2018.
ATED: 2018 to 2019 annual chargeable amounts
The Annual Tax Enveloped Dwellings (ATED) annual charges will
rise 3% from 1 April 2018 in line with the September 2017 Consumer Prices
Index. A Treasury Order confirming the charges will be published shortly
The new rates will be:
Annual chargeable amounts for the 2017 to 2018 chargeable
Annual chargeable amounts for the 2018 to 2019 chargeable
£500,001 to £1,000,000
£1,000,001 to £2,000,000
£2,000,001 to £5,000,000
£5,000,001 to £10,000,000
£10,000,001 to £20,000,000
£20,000,0001 and over
SD/SDRT/SDLT: Resolution of financial institutions
Legislation will be introduced in Finance Bill 2018 to 2019 to
ensure that Stamp Duty, Stamp Duty Reserve Tax (SDRT) and Stamp Duty Land Tax
(SDLT) are not chargeable twice on exercise of resolution powers under the UK
special resolution regime for managing failing financial institutions.
The exemption will be limited to the temporary transfer of
shares or land to a bridge entity and the transfer of shares in exchange for
temporary certificates issued to creditors that identify their entitlement to
the shares. This will simplify and strengthen the process of resolving a
failed financial institution and help to ensure that the “no creditor worse
off” principle is upheld. The change will have effect on and after Royal
Assent of Finance Bill 2018 to 2019.
SDRT: 1.5% charge on the issue of shares
The Government will continue to not apply the Stamp Duty and
Stamp Duty Reserve Tax (SDRT) 1.5% charge on the issue of shares (and
transfers integral to capital raising) into overseas clearance services and
depositary receipt issuers following the UK’s exit from the European Union.
Following a Court of Justice of the EU judgement in the case
of HSBC Holdings PLC and Vidacos Nominee Ltd v Commissioners for HM Revenue
& Customs (HMRC) (C569/07) and a subsequent First Tier Tribunal judgement
in the case of HSBC Holdings PLC and the Bank of New York Mellon Corporation
v Commissioners for HM Revenue & Customs  UKFTT 163 (TC), HMRC accepts
that the charge is incompatible with the Capital Duty Directive.