The Chancellor of Exchequer announced much publicized help for first time buyers in the form of a two-year stamp duty holiday, with no duty payable on transactions of £250,000 and less. All properties up to £125,000 remain exempt.
Although this provides some help for the first time buyer and housing market, it may not be the panacea that the Media encouraged by the Spin Doctors have held it up to be! The guidance provided by HM Revenue and Customs reveals the strict guidelines with in which the scheme is to function. It shows that there very few people who will benefit.
A first time buyer for the purposes of the scheme is a person who has never owned a freehold or leasehold residential property anywhere in the world. The guidelines prohibit a first time buyer purchasing a property, which is not to be used as their main residence or being purchased for somebody else. If two people are jointly buying the property then BOTH of them must fit the criteria.
Just how much do the Government think they are going to assist first time buyers and the housing market? Mortgage lenders are reluctant to lend more than 90%. Most young people have little or no savings. How many are really going to be in a position to benefit from this scheme? For many would be first time buyers the funds are provided by the Bank of Mum and Dad – which gives rise to the question, will they be entitled to the relief?
We in Norfolk and the surrounding counties have a good stock of housing valued at less than £125,000, which is already exempt from stamp duty land tax. How many local first time buyers are likely to be buying houses priced in the £125,000 - £250,000 bracket? The main beneficiaries are going to be those in areas where first time buyer properties fall into this bracket - principally the areas surrounding London.
One final bit of advice. A false declaration made in respect of these provisions carries criminal sanctions. Offenders could end up spending their holiday at Her Majesty’s pleasure and I don’t mean Sandringham!
Happy house-hunting! |
