Details of the Section
2.Subsection (2) introduces a new section 57AA into Part 4 of the Finance Act (FA) 2003.
3.New section 57AA(1) exempts an acquisition of residential property from a charge to SDLT on a freehold purchase or lease premium where the chargeable consideration (excluding rent) is more than £125,000 but not more than £250,000, the purchaser (or each of them) is a first-time buyer who intends to occupy the property as his or her only or main residence and the transaction is not one of a number of linked transactions.
4.New section 57AA(2)(a) and (b) define a “first-time buyer” as a person who has not previously acquired freehold or leasehold residential property in the UK, or its equivalent elsewhere in the world. Subsection (2)(c) and (d) apply an equivalent rule where a person has previously purchased property under alternative finance arrangements (under which a property is purchased by a financial institution, or jointly by a financial institution and a person).
5.New section 57AA(3) excludes from the conditions for relief grants or assignments of leases with less than 21 years to run. This ensures that a purchaser will not be denied relief because he or she has previously taken a short lease on a property.
6.New section 57AA(4) modifies the restriction on linked transactions. This ensures that relief will be available in cases where, for example, a purchase of a house or flat is accompanied by a separate lease of a garage in a block.
7.Subsection (3) inserts a new section 73CA into FA 2003 which allows the relief to apply to a purchase under alternative finance arrangements where the property is purchased by a financial institution, or jointly by a financial institution and a person, where the person is a first-time buyer.
8.Subsection (4) provides that regulations made by the Treasury under section 109 of FA 2003 are subject to negative resolution unless they amend the terms of the first-time buyers’ relief in a way which increases any person’s liability to tax.
9.Subsection (5) provides that first-time buyers’ relief is available for purchases under a shared ownership lease or shared ownership trust only where the purchaser elects to be taxed on a market value basis and the market value is more than £125,000 but not more than £250,000.
10.Subsection (6) provides for the relief to apply where the effective date of the transaction is on or after 25 March 2010 but before 25 March 2012.
