Thursday, 25 March 2010

When is a first-time buyer ( FTB ) not a first-time buyer?

Whist the Chancellor's plan to scrap the stamp duty below £250,000 for first-time buyers will give the housing market a new boost, the extent of the boost will be determined by the definition of “ Fist Time Borrower”.

According to HMRC in order to qualify for the stamp duty relief a buyer must not have acquired a major interest in residential property, not have acquired foreign property and the purchase must not involve a company, partnership or trustees . It is unclear whether those who have inherited property in the past would qualify.

In the case of joint purchasers both buyers have to be “ First Time Buyers”.

The rules themselves are very restrictive, very confusing ( even for conveyancing solicitors ) and will almost certainly delay the number of first-time buyers actually receiving the relief. I suspect that purchasers who define themselves as FTBs will be asked by their Conveyancing Solicitors to sign a statutory declaration confirming that they meet the Revenue’s requirements.

Conveyancers offering on line quotations should be careful about allowing buyers to define themselves as FTB’s and receive a quote stating that no stamp duty is payable.

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