New Help to Buy scheme prevents first time buyers benefiting from Stamp Duty Holiday

owendm

New Help to Buy Scheme seems to prevent first time buyers benefiting from Stamp Duty Holiday !     My son is looking to buy his first flat using Help to Buy and wants to benefit from the Stamp Duty holiday and complete before 31 March 2021.  However it seems the new HTB scheme only allows for completion after 31 March therefore after the holiday ends.   This seems totally unfair to first time buyers and adds £1000's to purchase costs.  Surely this is an oversight and not by design ??   

SDLT_Geek

After 31 March 2021 most first time buyers should benefit from the first £300,000 of the price being free of SDLT.

owendm

Maybe but if you are in the London area there are no new properties with Help To Buy anywhere near that price range.  You are looking at £450k - £500k for a 1 bed flat.  The HTB max has been set at £600k in London because of the market pricing.  So a lot of buyers are going to be hit very hard.  

Carl2510

Or your Son could be thankful that there is even a scheme out there helping people get on the ladder the stamp duty holiday was never meant to be. So would he of thought hard done by if it never came about I don’t think so.

owendm

Just to add.  There has been a lot of advertising and publicity of the new Help to Buy Scheme coming into play which I understand differs in that it will only be open to first time buyers from 1 April 2021.   What not has be mentioned or made clear is that the existing Help to Buy scheme ended on 15 Dec 2020 for new applications.   So those first time buyers finding a property and applying since 15 Dec'20 now have no opportunity to benefit from the SDLT holiday even if they can complete before 31 Mar'21.   Totally unfair and an extension needed to be provided for first time buyers in this situation

Slithery

owendm said:

This seems totally unfair to first time buyers and adds £1000's to purchase costs.  Surely this is an oversight and not by design ??   

Not unfair at all. The SDLT holiday is just a temporary emergency measure, the new help to buy rules were already designed for it not being in place. Your son's budget should have already accounted for the SDLT due.

SDLT_Geek

SDLT first time buyers’ relief, when applicable again, does not benefit purchases for over £500,000.

bhjm

owendm said:

New Help to Buy Scheme seems to prevent first time buyers benefiting from Stamp Duty Holiday !     My son is looking to buy his first flat using Help to Buy and wants to benefit from the Stamp Duty holiday and complete before 31 March 2021.  However it seems the new HTB scheme only allows for completion after 31 March therefore after the holiday ends.   This seems totally unfair to first time buyers and adds £1000's to purchase costs.  Surely this is an oversight and not by design ??   

bless those who earn enough to pay 300.000 or more as a first time buyer.

From 22 November 2017 first time buyers paying £300,000 or less for a residential property will pay no Stamp Duty Land Tax (SDLT).First time buyers paying between £300,000 and £500,000 will pay SDLT at 5% on the amount of the purchase price in excess of £300,000, a reduction of £5,000 compared to the amount of SDLT they would have previously paid.

MaryNB

owendm said:

Just to add.  There has been a lot of advertising and publicity of the new Help to Buy Scheme coming into play which I understand differs in that it will only be open to first time buyers from 1 April 2021.   What not has be mentioned or made clear is that the existing Help to Buy scheme ended on 15 Dec 2020 for new applications.   So those first time buyers finding a property and applying since 15 Dec'20 now have no opportunity to benefit from the SDLT holiday even if they can complete before 31 Mar'21.   Totally unfair and an extension needed to be provided for first time buyers in this situation

 Even if the previous HTB scheme deadline was later than the 15th of December and your son was able to apply it would be extremely difficult to complete by the end of March. It would be reckless for him to proceed as if there was no, or slim, chance he'd have to pay SDLT. There is massive demand on lenders, solicitors and surveyors leading to much longer time scales and searches are taking months for some buyers. 

I bought for the first time in November, never even looked into using HTB and even I knew there were deadlines approaching and changes coming.

The sole purpose of the SDLT holiday was to stimulate the housing market. It, along with the pent up demand after the first lockdown, worked because there's been a mini boom. It wasnt the government trying to be nice for the sake of it, it was to encourage people to buy who may not have been seriously considering it beforehand. If your son was already intending to buy, well he wouldn't be in the targeted group.

Angela_D_3

Itll be extended,  honestly i wouldn’t worry about it 

Crashy_Time

MaryNB said:

owendm said:

Just to add.  There has been a lot of advertising and publicity of the new Help to Buy Scheme coming into play which I understand differs in that it will only be open to first time buyers from 1 April 2021.   What not has be mentioned or made clear is that the existing Help to Buy scheme ended on 15 Dec 2020 for new applications.   So those first time buyers finding a property and applying since 15 Dec'20 now have no opportunity to benefit from the SDLT holiday even if they can complete before 31 Mar'21.   Totally unfair and an extension needed to be provided for first time buyers in this situation

 Even if the previous HTB scheme deadline was later than the 15th of December and your son was able to apply it would be extremely difficult to complete by the end of March. It would be reckless for him to proceed as if there was no, or slim, chance he'd have to pay SDLT. There is massive demand on lenders, solicitors and surveyors leading to much longer time scales and searches are taking months for some buyers. 

I bought for the first time in November, never even looked into using HTB and even I knew there were deadlines approaching and changes coming.

The sole purpose of the SDLT holiday was to stimulate the housing market. It, along with the pent up demand after the first lockdown, worked because there's been a mini boom. It wasnt the government trying to be nice for the sake of it, it was to encourage people to buy who may not have been seriously considering it beforehand. If your son was already intending to buy, well he wouldn't be in the targeted group.

It was designed to encourage people into mortgage debt that they can`t really afford, hoping for a spike in property market activity to offset the general gloom about the economy (why anyone still falls for this is beyond me) if you don`t have a few thousand to pay stamp duty you should not be buying 400-500k flats!