You are here: The Budget – stamp duty boost for first-time buyers with shared ownership
The Budget – stamp duty boost for first-time buyers with shared ownership
More first-time buyers will benefit from a tax break after the Chancellor extended stamp duty relief to those buying with shared ownership
First time buyers who buy shared ownership properties worth up to £500,000 will be exempt from stamp duty, the Chancellor announced.
Shared ownership schemes are a government initiative to help individuals or couples earning less than £80,000 (£90,000 in London) get a foot on the housing ladder. The properties are provided by housing associations. Most of the homes available are newly-built, but some are properties being resold by housing associations.
A buyer can buy a portion of the property – between 25 and 75 per cent of the value – and then pay rent on the rest.
The budget change fixes a flaw which excluded many buyers using the scheme from a stamp duty cut for first-time buyers introduced in November 2017. Mr Hammond said 121,500 first-time buyers had already benefitted from the tax break, with the number of first-time buyers at an 11-year high.
Now first-time buyers who use the shared ownership scheme will pay no stamp duty on their first share of property valued up to £500,000 – bringing them in line with other first-time buyers. The tax break is retrospective, meaning anyone who bought since November 22 2017 will be able to claim a refund.
The Government is inviting proposals from investors to help fund a new wave of shared ownership housing. The scheme is aimed at those who don’t earn enough to buy their own home outright, including Generation Rent.
Previously, buyers who use a shared ownership scheme could either make a one-off payment based on the total market value of the property, or pay any stamp duty tax in stages.
From yesterday (October 29), these buyers will be exempt from this tax.
Mortgage brokers and estate agents have generally welcomed the change, saying it’s a sensible step and more equitable for those who buy through shared ownership to have the same tax break as other first-time buyers.
Meanwhile, the Treasurey has extended the Help to Buy Equity loan scheme to 2023 but will restrict it to first time buyers rather than all movers, budget documents reveal.
To get instant contact details for Mortgage Brokers visit our sister site
