Does The New Stamp Duty Holiday Apply To You?
I may no longer be classed as a ‘first time buyer’, but following the governments revelation of their new 2 year first time buyer stamp duty holiday last week I have to admit that I was interested in how they were going to regulate it.
Essentially, all first time buyers will now be exempt from paying stamp duty fees on property investments valued above £250,000 – which is fantastic news for anyone who has previously struggled to climb onto the property ladder.
However what concerns me most about this new stamp duty holiday is the government’s definition of a first time buyer, and similarly, how they are going to ensure that only first time buyers take advantage.
Currently you are exempt from taking advantage of this tax relief if:
- You have inherited a property – even if you don’t buy this property, should you wish to invest in property at a later date you won’t be classed as a first time buyer
- You are a young buy to let investor – can only take advantage if the property is your first and only main home
- You are a divorcee - even if you are investing independently for the first time you will be disqualified from this relief
- You own a static caravan - by law you legally own the land beneath your temporary holiday home and are therefore exempt
Yet, despite these clear distinctions from the government on whom they class to be a ‘first time buyer’, there are in fact few methods available to help regulate this scheme.
Take this for instance…
Say you invest in a property. It is your solicitor’s responsibility to tick the box which defines whether or not you are a first time buyer. MEANING they could easily help you to bypass this rule and harness this tax relief.
Next, take in the fact that previous property owners can no longer be held on the land registry. For the government to be able to check and identify whether or not you have previously owned a property, they will have to do a lot of delving, which means a lot of research and a lot of hard work!
With such easy loopholes, it does make you wonder why the government doesn’t just open up this stamp duty holiday to all property owners. It would definitely save them a lot of hassle whilst benefiting the property market as a whole. Hopefully they will see sense.
Wendy xx
