Stamp Duty changes

Dave234

Hi,

I'm in the process of purchasing my first house through London Help to Buy Equity Loan. There are reports that stamp duty may be significantly cut for first time buyers in the next government budget on 22 November, this would be hugely helpful.

We have had an offer on a house accepted and Help to Buy Authority to Proceed. Full mortgage application is going through at the moment.

Does anyone know at what point Stamp Duty is calculated? I'm trying to figure out if I should wait to exchange and/or complete until after 22 November to get the lower stamp duty rate if it changes.

Thank you for any thoughts!

Rambosmum

The last thread like this, suggested that even if it is changed, it may not come in to effect immediately and stamp duty is calculated at exchange, so if you exchange before the effect takes place, then you'll still have to pay current costs.

lika_86

Rambosmum wrote: »

The last thread like this, suggested that even if it is changed, it may not come in to effect immediately and stamp duty is calculated at exchange, so if you exchange before the effect takes place, then you'll still have to pay current costs.

The last stamp duty change was pretty much immediate. Is there a reason why you think it might not be this time?

Dave234

I would be surprised if the stamp duty change was not immediate, otherwise the first time buyer market would just come to a stand still while everyone waited.

Realopinion

There isn't a simple answer on this as you won't know what the change will be and if it is with immediate effect. When stamp duty changed in 2015 it was with immediate effect, however in the April 2016 the the second home stamp duty didn't apply to contracts entered into (exchanged) before 26 November 2015 that complete on or after 1 April 2016.

As you are buying a new build under the Help to Buy equity loan scheme, you sadly are already under the 28 day exchange clock so have limited ability to delay exchange. It may mean that you are unluckily unable to benefit from the change if it comes in. Then again, it may not even happen so keep pushing your solicitor to get the work completed in time for your exchange date - good luck!

_CC_

Rambosmum wrote: »

The last thread like this, suggested that even if it is changed, it may not come in to effect immediately and stamp duty is calculated at exchange, so if you exchange before the effect takes place, then you'll still have to pay current costs.

Unlikely to be immediate for hikes, such as the 3% surcharge.

The last cut was effective as of midnight budget day IIRC.

Dave234

Thanks all for the comments, really appreciated!

you sadly are already under the 28 day exchange clock so have limited ability to delay exchange.

I thought authority to proceed is valid for 3 months? Not 28 days. The seller may wish to exchange within 28 days but I'm not sure this is a legal requirement from HTB perspective?

brit1234

Dave234 wrote: »

I'm in the process of purchasing my first house through London Help to Buy Equity Loan. There are reports that stamp duty may be significantly cut for first time buyers in the next government budget on 22 November, this would be hugely helpful.

Personally as a first time buyer I hope they don't cut stamp duty as it's a false economy with prices being put up because of it.

From the political TV programs the figure of £250k keeps coming up as free stamp duty below that. However the typical ripoff London Help to buy properties are about £550-£600k so may be far too high for stamp duty excemption.

chappers

Rambosmum wrote: »

The last thread like this, suggested that even if it is changed, it may not come in to effect immediately and stamp duty is calculated at exchange, so if you exchange before the effect takes place, then you'll still have to pay current costs.

Stamp duty is calculated on the completed sale price and becomes due 30 days after completion.
If the change comes in between exchange and completion you will normally have the choice of which method to use. If the change comes in before exchange then you will normally be tied to the new rules

mrginge

If FTBers are getting yet another bung it’ll more than likely come through HTB or ISAs rather than stamp duty.

Stamp duty changes disproportionately help better off FTBers so are inequitable.

jmo of course.

chappers

... and as someone else said doesn't help some people at all