First time buyers and expensive properties

From midnight on Budget Day, relief from Stamp Duty Land Tax will be available for first-time buyers buying a property for up to £250,000. To qualify, the purchaser must intend to occupy the property as their only or main home, so it will not benefit buy-to-let investors. On other transactions the whole consideration paid on properties purchased for between £125,000 and £250,000 is charged to SDLT at 1%, so this relief is worth up to £2,500.

To pay for this, the rate of SDLT on properties sold for more than £1m will rise from 4% to 5% for transfers on or after 6 April 2011. On a property just over the £1m limit, this will increase the tax by £10,000. SDLT is paid by the purchaser of a property, but it is likely to depress the price that a seller can charge.