Announced initially as part of the Autumn budget, a new SDLT relief has been introduced, specifically aimed at first time buyers. This sees the abolishment of SDLT for first time buyers on properties costing less than £300,000. For those buying in London, it would have been quite a coup to find a property that inexpensive, so relief is given on the first £300,000 on a property costing up to £500,000. The part in-between would attract SDLT at 5%, meaning a maximum of £9,999 due.

This relief is only available for first time buyers purchasing their first property in the UK, and therefore any property abroad or passed down through inheritance would be considered an interest in a dwelling even if never lived in and relief would not be permitted.

The main concern is that the relief is completely taken away as soon as the property’s value goes above £500,000 meaning that the whole amount becomes chargeable to SDLT. However, this may not be as bad as it first seems. For properties over £500,000 it may be possible to allocate part of the purchase price against chattels (tangible moveable property) such as carpets, white goods and other free-standing furniture as these would be exempt from the calculation of SDLT. The value attributed to these items must be allocated on a reasonable basis, such as compared with similar prices available elsewhere.

If the property falls below the £500,000 mark but still contains a lot of moveable furniture it may still be worth allocating their value as this would reduce the amount of SDLT payable. It will be necessary to keep all documents relating to the value of these chattels in case HMRC should question the value of the land transaction.

For anyone seeking to calculate the SDLT, HMRC provide an easy to use, question by question calculator here https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro

Blog written by: Matthew Keetley