Budget 2010: Your stamp duty questions answered

In his last Budget before the election, the chancellor has outlined changes to stamp duty.

From 25 March first-time buyers purchasing properties worth up to £250,000 will pay no stamp duty. The plan is for this to continue for two years. Alistair Darling has also proposed an increase in stamp duty on properties worth more than £1m. He said this would not come in until April 2011, well after the election.

What constitutes a first-time buyer? I had a property a long time ago but have since lived in rented accommodation. Will I qualify? Martin, Norwich.

I'm afraid not. According to the Treasury, a first-time buyer is classed as someone who has not previously owned a property anywhere in the world. So even though you don't currently own your own home, the fact that you have previously means you aren't eligible for the stamp duty holiday.

I've put a deposit down on a house worth £175,000, but the mortgage is not sorted and the contracts are not yet signed. Can I avail myself of the stamp duty holiday? I am a first-time buyer. Paul Thompson, Belfast.

From the details you have given, it looks like you will qualify. You are a first-time buyer purchasing a property worth less than £250,000. The important date is the date of completion. As long as you complete between 00.01 on 25 March 2010 and before 25 March 2012, you shouldn't have to pay any stamp duty.

The other thing to bear in mind is that the place you are buying must be your main home, it can't be a holiday home or a buy-to-let.

For more specific information, you can call the Stamp Taxes Helpline on 0845 603 0135. HMRC website for its guidance.

My partner is a first-time buyer but I am not. We are about to buy our first home together. Will we benefit? Shaun Pritchard, St Newlyn East, Cornwall.

The guidance from the tax authorities, the HMRC, appears explicit.

"The purchaser must not, either alone or with others, have previously acquired a major interest in land which includes residential property, or an equivalent interest in land situated anywhere in the world."

That seems to rule you out as you are buying together - as joint purchasers - and one of you has previously owned a home.

But supposing it was just your partner - a genuine first-time buyer - who was the purchaser of your new home? What then?

The HMRC has advised that if your partner was the only person in whose name the transaction was being recorded, then they could in fact take advantage of the stamp duty relief.

What if you were a married couple? The same would apply.

If the first-time buyer was the sole owner of the newly purchased property and their husband or wife had no share in it, then again the deal could go through without stamp duty being payable.

I'm a first-time buyer, and I have just paid £1700 in stamp duty - this morning in fact. We complete on 1 April. What about us? Have we just missed out on the cut? Can we claim it back? Dylan Parry, Gloucester.

Good news for you. HMRC says that stamp duty is payable only on the completion date. If you have paid in advance you have probably handed it over to your solicitor to take care of all the necessary arrangements. Just ask them for it back.

My fiance part-owns/part-rents a flat, and we live here together. We wish to own a new place soon and have seen the stamp duty news. Would we be considered first-time buyers under this scheme as I have not purchased a house before? James Smith, Basingstoke.

If you buy the new property in your joint names, then there will be no stamp duty exemption for you. The fact that your fiance has bought before, even in a part-ownership scheme, counts against you. But if you were to buy your new home in your own name only then you could claim the tax relief.

I am a first-time buyer and purchased a property on 29 January this year and paid stamp duty of £1,630. Do I have any possibility of claiming any of this money back? Vincent Lyle, Glasgow.

Sorry, no. The tax relief is not retrospective. Remember, the key date is the date of completion.

If that was before 00:01 Thursday 25 March then you paid the tax due at the time and you cannot get it back.

This article was originally written for the BBC website, and can be found here .

25 March 2010

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