LoginSubscribe to Alerts
Help to Buy England: FAQ
Do I have to pay stamp duty?
The Stamp Duty Land Tax (SDLT), commonly referred to as simply stamp duty, is applicable on all Help to Buy properties. This means for Help to Buy: Equity Loan the SDLT is applicable on the full 100% property purchase price, even it's split up into the 5% deposit, 20% equity loan and 75% mortgage.

For Shared Ownership, there are two ways to pay SDLT. You can either make a one-off payment up front (known as making a market value election) which is based on the full market price of the property. Otherwise, you can pay the stamp duty in stages. If you choose this way you pay SDLT on the first sale amount. Yet, you don't have to pay stamp duty when you're staircasing until you own 80% of the property. You also don't have to pay SDLT when the home is sold. For more details on how SDLT is applied you can go to the government's SDLT Shared Ownership page.

The current rates for SDLT are as follows:

Band SDLT for one home
£0 – £125k 0%
£125k - £250k 2%
£250k - £925k 5%
£925k - £1.5m 10%
£1.5m + 12%

Can I rent out my Help to Buy home once its bought?
No, you cannot sublet your home once you buy it. The aim of Help to Buy is to assist buyers to get on the property ladder. It cannot to be used for buy to let. In addition your home must be your only residence and the place you intend to live in. Nevertheless, there could still be some exceptional circumstances where it would be possible to rent out your home.

For instance, if you were in the armed forces on a tour of duty away from home then it may be possible but even then you would need permission from your local housing association and mortgage lender. In general, you cannot rent out your home.

Can I buy a home off-plan?
Yes, one of the many benefits of buying a new house is you can purchase it even before it's been completed. The advantages of this are many including getting the builders to add fixtures and fittings you choose as part of the build.

When a new home development is being built, the housebuilder ideally wants as many homes sold as quickly as possible. The result of this is an early potential buyer being offered financial incentives such as having legal fees or stamp duty paid, or some ‘extras’ provided for free.

Of course, when buying off-plan, it's important not to rush into any decision no matter what financial incentive you're given. You should have as clear a picture as possible of the new house you're moving into. The main way you'll achieve this is by viewing the show home. Yet, you'll also be shown floor plans, online properties that are similar or computer generated designs. You can ask for any documentation or resource from the developer that you feel would give you a better idea of the home you're thinking of buying.

Just as with any other house purchase, do as much research as you can about the area, double check any information you're given and don't rely entirely on the promises given by the developer. It may seem strange at first buying a home that hasn't been built yet, but it can also be very exciting as well as you see your new home being constructed right before your eyes. Buying a home off-plan can also have extra advantages such as it usually being worth more when it's completed than the price you paid for it at the beginning of construction.

If and when you do decide to buy off-plan, you should know already when the estimated completion date is. Builders have to work to strict guidelines so if they're late in due dates they can pay financial penalties. Once you feel completely satisfied the property is the one you want to purchase then you can reserve it. It may be a plot you reserve and again within a development the sooner you can reserve a plot, the better. After you have reserved your new home, you can pay a deposit at a later date.

If you already know you qualify for Help to Buy, you can go to your local Help to Buy agent and inform them of your plans. You also need to find a lender to provide the remaining mortgage, for instance, 75%, for equity loan. You also need a solicitor to deal with all the contract paperwork.

As the completion date of your new home becomes nearer, so you can check the progress of the house build and deal with the final paperwork. You should have a snagging survey carried out and once you're satisfied everything is correct, it's simply a case of moving into your new home.

Help to Buy England: FAQ
Do I have to pay stamp duty?
The Stamp Duty Land Tax (SDLT), commonly referred to as simply stamp duty, is applicable on all Help to Buy properties. This means for Help to Buy: Equity Loan the SDLT is applicable on the full 100% property purchase price, even it's split up into the 5% deposit, 20% equity loan and 75% mortgage.

For Shared Ownership, there are two ways to pay SDLT. You can either make a one-off payment up front (known as making a market value election) which is based on the full market price of the property. Otherwise, you can pay the stamp duty in stages. If you choose this way you pay SDLT on the first sale amount. Yet, you don't have to pay stamp duty when you're staircasing until you own 80% of the property. You also don't have to pay SDLT when the home is sold. For more details on how SDLT is applied you can go to the government's SDLT Shared Ownership page.

The current rates for SDLT are as follows:

Band SDLT for one home
£0 – £125k 0%
£125k - £250k 2%
£250k - £925k 5%
£925k - £1.5m 10%
£1.5m + 12%

Can I rent out my Help to Buy home once its bought?
No, you cannot sublet your home once you buy it. The aim of Help to Buy is to assist buyers to get on the property ladder. It cannot to be used for buy to let. In addition your home must be your only residence and the place you intend to live in. Nevertheless, there could still be some exceptional circumstances where it would be possible to rent out your home.

For instance, if you were in the armed forces on a tour of duty away from home then it may be possible but even then you would need permission from your local housing association and mortgage lender. In general, you cannot rent out your home.

Can I buy a home off-plan?
Yes, one of the many benefits of buying a new house is you can purchase it even before it's been completed. The advantages of this are many including getting the builders to add fixtures and fittings you choose as part of the build.

When a new home development is being built, the housebuilder ideally wants as many homes sold as quickly as possible. The result of this is an early potential buyer being offered financial incentives such as having legal fees or stamp duty paid, or some ‘extras’ provided for free.

Of course, when buying off-plan, it's important not to rush into any decision no matter what financial incentive you're given. You should have as clear a picture as possible of the new house you're moving into. The main way you'll achieve this is by viewing the show home. Yet, you'll also be shown floor plans, online properties that are similar or computer generated designs. You can ask for any documentation or resource from the developer that you feel would give you a better idea of the home you're thinking of buying.

Just as with any other house purchase, do as much research as you can about the area, double check any information you're given and don't rely entirely on the promises given by the developer. It may seem strange at first buying a home that hasn't been built yet, but it can also be very exciting as well as you see your new home being constructed right before your eyes. Buying a home off-plan can also have extra advantages such as it usually being worth more when it's completed than the price you paid for it at the beginning of construction.

If and when you do decide to buy off-plan, you should know already when the estimated completion date is. Builders have to work to strict guidelines so if they're late in due dates they can pay financial penalties. Once you feel completely satisfied the property is the one you want to purchase then you can reserve it. It may be a plot you reserve and again within a development the sooner you can reserve a plot, the better. After you have reserved your new home, you can pay a deposit at a later date.

If you already know you qualify for Help to Buy, you can go to your local Help to Buy agent and inform them of your plans. You also need to find a lender to provide the remaining mortgage, for instance, 75%, for equity loan. You also need a solicitor to deal with all the contract paperwork.

As the completion date of your new home becomes nearer, so you can check the progress of the house build and deal with the final paperwork. You should have a snagging survey carried out and once you're satisfied everything is correct, it's simply a case of moving into your new home.

Sign up to our newsletter

Get all the up-to-date information on new homes, government buying schemes and initiatives, tips on moving home, saving and much, much more.


© 2021 WhatHouse
Click here to see your activities