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Here are the changes to stamp duty summarised

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First-time buyers will be exempt from stamp duty on any property up to £300,000. If you are buying a property worth up to £500,000, you will pay stamp duty on the chunk which is over £300,000 only.

In a move which may see FTB displace GSOH as the must-have description on dating sites, this exemption does not apply if you’re a couple of one of you has owned or bought a property before. You must both be first-time buyers if it’s a joint purchase.

The exemption applies to anyone who has not yet completed, even if you’ve exchanged.

So how much is at stake?

Well. If you are buying a flat for £280,000, you will pay nothing. Saving you £4,000.

If you are buying a flat for £400,000, you’ll pay 5% on the amount over £300,000, in other words 5% of £100,000 which is £5,000. Before this amend, you would have paid £10,000. So you save £5,000.

Here’s how this horrible heinous tax works for everyone else:

  • Up to £125,000 purchase price:0% stamp duty
  • £125,000.01 to £250,000:2% (on that portion of the purchase price)
  • £250,000.01 to £925,000:5% (on that portion of the purchase price)
  • £925,000.01 to £1,500,000: 10% (on that portion of the purchase price)
  • £1,500,000.01+:12% (on that portion of the purchase price)

 

I’m not there yet – I’m still saving and that deposit’s a way off

If you’re still a good few years off having the luxury to worry about stamp duty then don’t forget about the free help and top ups available to you.

Check out the Lifetime ISA and the Help To Buy ISA. 

The Lifetime ISA is best is you’re under 40; dead set on buying a flat/house and have up to £4,000 a year to save. You will get a free Govt top up of up to £1,000 a year. Can you persuade your parents or family to contribute? Every £4 gets you another £1.

You can also have a stocks and shares version of this account. The ups and downs mean this is only worth considering if you’re saving with a 4-5 year timeframe at least. We like Nutmeg for investment newcomers or Hargreaves Lansdown for those more confident or with someone to help them navigate the investment world.

Prefer to stick with cash? Skipton Building Society, Newcastle Building Society and Nottingham Building Society are the only companies which currently (as of Nov 2018) offer Cash-only Lifetime ISAs!

Warning – exit penalities apply so only worth doing if you are very sure this money is either for buying a property OR to fund your retirement.

Help to Buy ISA

This is cash only, but there’s no age restrictions and if you change your mind there are no penalties. The downside is you can pay in less so the potential freebies are also less.  These accounts are more widely available – currently Barclays pay 2.27%.

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