Date: Wednesday 24 March 2010
Taylor Wimpey, one of the UK’s largest housebuilders with developments across the UK, has welcomed today’s move by Chancellor Alistair Darling to raise the stamp duty threshold to £250,000 for first time buyers.
Kevin Belsham, sales and marketing director, said the change was good news for buyers who could now save up to £2,500 on the cost of purchasing their first home.
He commented: “We’ve seen some positive signs that recovery in the housing market is now underway, but first time buyers are still finding it difficult to get on the property ladder. These changes could benefit them over the next two years and, of course, enabling more people to buy their first home is also good news for the rest of the housing market.”
Taylor Wimpey has a range of properties across the UK that will now be exempt from stamp duty.
Taylor Wimpey already has a number of initiatives in place to help first time buyers. The housebuilder has recently introduced a scheme which invites family and friends to help purchasers with the cash deposit they need to buy a new home and in return Taylor Wimpey will pay them a guaranteed return of 5% per annum for five years on the sum invested. Family and Friends Advantage, as the scheme is known, is available on deposits of up to 20% of the purchase price.
Another way the housebuilder is assisting buyers with their deposit is through its Deposit Match scheme. This initiative sees Taylor Wimpey match a buyer’s deposit, up to 10% of the purchase price, via an interest free loan over 10 years. Alternatively, it will contribute a 5% deposit on selected homes.
The Easystart Scheme is also available, whereby purchasers can buy a new home and pay as little as 85% of the price straight away. A 5% deposit is paid on exchange of contracts and a further 80% is paid via their prearranged mortgage on completion. Taylor Wimpey will loan the remaining 15%, secured by a legal charge, with no rent or interest to pay for up to 10 years. This offer is limited to selected homes up to £150,000, throughout the UK.
Stamp Duty Frequently Asked Questions
What is stamp duty?
Stamp duty land tax (SDLT) is a tax applied by the government when you buy a house, flat or other types of land or buildings.
Stamp duty is divided into four sections:
- £250,000 and under 0%*
- £250,001 - £500,000 3%
- £500,001 - £999,999 4%
- £1 million upwards 5%*
*From the 24th March 2010 the lower limit has increased to £250,000 – a saving of £2,500. A new 5% band is in place for properties over £1 million.
The amount you pay is calculated on a ‘slab structure’ rather than a sliding scale. So, on a property costing £252,000 the buyer would have to pay 3% of the total selling price, not just for the £2,000 that goes over the threshold.
Are there any exceptions?
Zero-carbon homes under £500,000 are exempt from stamp duty and properties over £500,000 can have their stamp duty bill reduced by £15,000.
Additionally, properties in areas identified as ‘disadvantaged’ by the government, do not have to pay stamp duty on homes under £150,000.
Do you have to pay stamp duty?
Yes, it is a legal requirement when buying a freehold or leasehold. The paperwork will usually be completed by your solicitor or licensed conveyancer on your behalf, but make sure that all the details are correct before endorsing it.
How does this affect my house-hunting?
This is another cost that you will need to budget for when buying a house. It is also a cost that may make you look at house prices more tactically, especially if your budget is close to the band thresholds.
For example, a house costing £250,000 will attract a £0 stamp duty bill. If you pay even a penny more for the property however, the stamp duty would be £7500.03.