Week 3

I have decided to focus on one key area of the budget and that is the one that made the headlines... Stamp Duty Land Tax for first time buyers.

What does this actually mean?

For two years from 25 March 2010 first time buyers (and only first time buyers) acquiring the property which they then occupy as their main residence may CLAIM to use an initial band of £250,000. Please note the use of the word Claim. You will have to make a seperate claim and do not assume the stamp duty will automatically be removed !

Lets look at an example

Jermain, a first time buyer, is considering buying one of two flats

Flat 1 costs £248,000
Flat 2 costs £252,000

The stamp duty land tax liability on the first property is £2,480 but on a claim it is reduced to nil.

The stamp duty land tax liability on the second property is £7,560 with no relief at all !!!

Now is the time to buy if you are considering purchasing your first house however be aware if it is a penny over £250,000 you will be charged stamp duty so please consider your options.

Remeber you only have until March 2012 for this to apply as well !

I have been asked the following question a good few times this week and I thought i would share it with you...

I want to buy a house with my partner but one of us has previously owned a property. Can we claim relief?

The answer is NO !! All of the buyers have to be first time buyers !!

I have prepared a more detailed booklet on the budget an dif you are interested please message me.

I will be voicing my opinion on the budget on my website over the weekend www.uktaxtips.com

If you have any questions please do not hesitate to get in touch

Yours in Tax

Mitch
mitch@uktaxtips.com

mitch@uktaxtips.com