With only three months of the stamp duty ‘tax holiday’ remaining, first time buyers must act quickly to avoid paying Stamp Duty Land Tax on their home purchase, warned the National Association of Estate Agents as it releases its new advice for FTBs.
Peter Bolton King, chief executive of the NAEA said: “From March 2012 the holiday is well and truly over for first time buyers. Once the Government ends the tax exemption, FTBs will face a tax of three per cent on all home purchases over £250,000.
With three months remaining until the Stamp Duty Land Tax exemption for FTBs comes to an end, the NAEA has issued new advice for FTBs:
1. Stay affordable:
The key word for lender is affordability, and it should be for you as well. The amount you can borrow from a lender should depend on how much you can afford to repay each month. But when deciding on your budget, remember that what seems affordable at the time of purchase might not be so affordable once interest rates move or your employment situation changes.
2. Don’t forget about fees:
Experienced home buyers will remember to include professional costs in their budget, but when buying your first home it can be easy to forget the need to set aside cash for fees to lenders, insurers, surveyors, and other professionals.
3. Choose the professionals:
When buying your first home remember to think about who is selling it to you. Buying your first home can often be a stressful experience, as well as the biggest financial transaction of a person’s life.
4. Keep a paper trail
There can be a lot of paper to keep track of when buying a home, but it’s important to keep an organised file with all your documents associated with the purchase in it. For FTBs it is also sensible to keep detailed notes about the properties that you’ve viewed including important information such as possible repairs needed to the kitchen or bathroom as these can eat significantly into your budget if urgent work is required.
5. Know your maximum offer:
When you’ve made your mind up, and it is time to put in an offer, always remember what your maximum offer is. The amount you decide to open with is vital, so work out what your absolute maximum purchase price, and then work backwards.
If your first bid is turned down, then be flexible where possible with your second offer, but don’t automatically jump to your maximum affordability. Meeting the buyer half-way can be a good response to show you are serious.
