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Property News > Shared Ownership First-Time Buyers Risk Missing Out on Stamp Duty Exemption
Shared Ownership First-Time Buyers Risk Missing Out on Stamp Duty Exemption
The Budget revealed a Christmas present to first-time buyers with the stamp duty exemption. It seems though that some may be missing out if they are using certain options to buy their homes. This is the case for those using shared ownership as a way to be able to afford their new home.Shared ownership has helped plenty of first time buyers to get on the property ladder, and to get the home that they have always wanted. The problem is though that this will clash with the stamp duty exemption as the two policies clash.Another scheme that hinders the ability to use the stamp duty change to save money is if you pay the stamp duty payment by chunks rather than an upfront cost. That is more than likely to annoy people who are already paying for stamp duty in that way.The stamp duty exemption came into effect after Wednesday, making it so first-time buyers didn’t have to pay it for houses under £300,000. Houses with a cost from £300,000 to £500,000 would also get a discount on the amount they pay.When the cost of the house hits the £500,000 point, this is where stamp duty once again will come into effect and it will have to be paid in full. This includes first time buyers who may be paying under £500,000 in a shared ownership, but the house still costs over £500,000. This is likely to be a problem for many buyers in London where houses are more expensive than many other parts of the country.When it comes to shared occupier buyers, they usually have two ways to pay stamp duty. This is done by paying the duty on the share of the home that they are buying, they paying the rest when they own the house in full. The second option is to pay the stamp duty in full, meaning that a future payment is ruled out for them. Not surprisingly, first time buyers normally take the option of paying the share option to save money.The best option if affordable is to pay the stamp duty up front. What this does is to make it so the duty is paid on how much the house costs at the time of purchase. Those who pay it in the share value risk a higher than expected payment in the future, as it is based on what the house is worth at the time of payment, not when the payments started originally.What first-time buyers have to be aware of is that the new stamp duty exemption does have pitfalls and rules that can cause issues for them. While it is a welcome change, the sudden implementation has brought with it a few problems that first time buyers will have to make sure they are aware of.