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A Christmas bonus for shared ownership buyers

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First-time buyers who bought a shared ownership property in the last twelve months should check if they are due a refund on any stamp duty paid.  

That’s because when Chancellor Hammond extended the stamp duty relief available to first-time buyers of shared ownership property in his Autumn 2018 budget, he also applied the extension retrospectively to any qualifying transactions that took place between 22 November 2017 and 29 October 2018.

Since November 2017, relief has been available to first time buyers of shared ownership property who opted for the full market value election, paying stamp duty on the value of the whole property not just their share. Now, the relief has been extended to the first premium for those opting to pay their stamp duty in stages, and, in the case of a newly granted lease, to the portion calculated on net present value of rent.

For those paying in stages, first time buyer relief will continue to be excluded from subsequent stages of any so-called ‘staircasing’.  And for those purchases of a property with a market value in excess of £500,000, normal stamp duty rates will apply.

Stamp Duty Land Tax (SDLT) is payable in England on residential property transactions where the market value is more than £125,000, with a tiered scale related to the purchase price, but there are different rules if you’re buying your first home and the purchase price is below £500,000.  These provide a complete exemption from stamp duty for qualifying first-time buyers where the full market value of the property they’re buying is £300,000 or less, and a reduced bill when the full market value is £300,001 and £500,000.  Overall, this can make a saving of up to £5,000 on the stamp duty payable.

When the property is being purchased under an approved shared ownership scheme, the calculations are more complex, and buyers can choose whether they pay SDLT on the full market value or just on the value of the share they have purchased.  Also, when buying a new lease for a new build shared ownership property, SDLT is due on what is known as the ‘net present value of rent’.

Said property law/conveyancing expert Sarah Avern of Band Hatton Button solicitors in Coventry:  “Any first time buyer who completed on a shared ownership purchase on or after 22 November 2017 and opted to pay stamp duty in stages, can now make a claim for a refund of stamp duty.  And those who elected to pay the full market value option should also check where they stand, if the purchase involved a new lease, as they may be due a rebate on the rental element, to which the relief has also been extended.

“Many first-time buyers could stand to benefit from the changes, as they are less likely to have opted for the market value election.  It involves paying out a large sum up front in expectation of later staircasing, and it’s often not a viable option for those starting out on the property ladder.”

Any claim must be made to HMRC no later than 28 October 2019.  Refunds will also attract repayment interest at 0.5% for the period involved.

Saah added:  “For those not yet on the property ladder and considering shared ownership, it’s worth getting some guidance in advance to understand what costs will be involved at each stage as it can involve a complex set of calculations.”

 

Understanding the options on stamp duty for shared ownership purchases
Market value Election : pay up front

You use the total market value of the property to calculate how much to pay, no matter what size share you are buying.  You don’t pay any more SDLT after this, even if you buy a bigger share in the property later.

 

Paying in stages : pay as you go 

You use the price you pay for the lease – known as the ‘lease premium’ – if it’s above the SDLT threshold.  If the lease premium is below the threshold, you don’t pay SDLT at this point.   Those who qualify will receive the first-time buyer exemption on the SDLT against the lease premium, but will not qualify for the exemption if they buy a bigger share of the property later.

 

Staircasing 

If you buy any more shares in the property, you don’t have to pay any more SDLT or send a return to HMRC until you own more than 80%, but once your share of the property goes over 80% you must send a return and pay SDLT on the transaction that took you over 80% and any transactions after that. Once you own over 80%, earlier purchased shares may become linked and so SDLT might become due on those previous shares. No first-time buyer relief will apply to staircasing share purchases after the initial lease premium transaction.

 

SDLT on new leases 

This is the complex part of the calculation when a new lease is involved, as you may have to pay SDLT if the total rent over the life of the lease is more than £125,000. This is known as the ‘net present value’ and SDLT is due at 1% on the amount over £125,000 and must be added to any SDLT being paid on the lease premium.  It is calculated by working out the current value of the rent you will pay to the housing association over the full length of your lease.

 

Firm lands triple recognition at regional awards ceremony

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Coventry law firm Band Hatton Button has landed triple recognition at a regional awards ceremony in what has been a record year of accolades for the firm.

Keri Wood, lawyer in the wills, trusts and probate department scooped young lawyer of the year at the Warwickshire Law Society’s annual dinner, which was attended by 120 people and 8 law firms at the Manor Hotel in Meriden.

Daniel Blood, Head of commercial property at Band Hatton Button, was also named as lawyer of the year, while the residential property team triumphed in the team of the year category.

Keri was recognised for her inspirational journey since joining the firm in 2006 – working her way up from a receptionist to a fully-fledged lawyer, which involved studying alongside her full-time job.

Daniel – who oversees a 20-strong group – saw his commercial property team beat their 2018 financial year target by over 30 per cent, a record result, with Daniel smashing his own individual target by more than 40 per cent.

Band Hatton Button’s residential property team has seen consistent growth. The alleviation of stamp duty for first-time buyers meant that Band Hatton Button’s residential property team, led by Sarah Avern, saw a 46 per cent increase in demand in the 2017 financial year, smashing their financial target by around £180,000.

This growth has continued, with residential property currently operating at 116 per cent of their financial target for the 2019 financial year.

The triple recognition follows the firm’s recent success at the Coventry Telegraph Business Awards, where Band Hatton Button won the contribution to the community and leadership team of the year categories.

Mark Moseley, managing director at Band Hatton Button, said: “To receive five separate pieces of recognition for our work in 2018 is a phenomenal achievement.

“It also reflects what a buoyant region we are operating in with growth across the majority of departments, and the challenge is to keep on capitalising on the opportunities that are out there.

“Keri is a fantastic role model for the next generation of lawyers, while Daniel and Sarah have unrivalled reputations in their respective areas that are helping us to continue our growth year-on-year – congratulations to all of them on their awards.”

Associate level promotions for six lawyers

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A growing Coventry law firm will see the New Year in with associate level promotions for six of its lawyers.

Band Hatton Button, based on Warwick Road in the city centre, has promoted lawyers Charlotte Macalister, Christina Polychronakis and Lisa Moseley from the firm’s wills, trusts and probate team to associate.

Kristy Ainge and Raman Dhillon from the firm’s litigation department are also starting 2019 at associate level, as is residential property lawyer Rani Bola.

The promotions come off the back of a strong period of growth for the firm, which currently has an annual budget of £4.5 million.

“This particular group epitomises why we are growing organically as a business with their positive customer feedback and dedication to personal development, whether that’s expanding their legal knowledge or engaging with community groups,” said Mark Moseley, managing director at Band Hatton Button.

“They have around 50 years of service to the firm between them.

“Charlotte, Christina and Lisa are all now accredited members of Solicitors for the Elderly, and are signed up as Dementia Friends, ensuring they are tuned in to how issues affecting the nation’s elderly community can affect their assets in later life.

“Having Kristy on board as a solicitor advocate also means we are able to represent clients in court as well rather than handing a case over to a third party – and because of her strong networking skills we are making significant headway with this service.

“Raman joined us two years ago with a sterling track record of acting on multi-million pound cases and has developed her case load to drive strong year-on-year growth for the litigation department.

“Rani is one of our longest-serving colleagues having joined us in 2000 and has built up unrivalled relationships with a range of the region’s estate agents, which has stood us in good stead, and the residential department continues to see exorbitant work levels.

“This group of professionals are role models for other up-and-coming lawyers which is particularly useful as we look to expand our teams further over the coming year.”

 

Coventry and Warwickshire’s hot property market creates vacancies

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Coventry and Warwickshire’s hot property market has created a number of new vacancies at one of the city’s law firms.

Band Hatton Button, which is based on Warwick Road, has three vacancies in their commercial property department and two in their residential property department.

Both departments are operating at 116 per cent and 117 per cent of their annual targets respectively.

It comes as the Office for National Statistics revealed house prices in the West Midlands showed the highest annual growth in England in the 12 months to September 2018 (6.1 per cent).

The vacancies on offer in Band Hatton Button’s residential property department include a lawyer and a paralegal, while the roles in commercial property are for two lawyers and a paralegal.

Band Hatton Button – which has an annual budget of £4.5 million – is also recruiting for a lawyer to bolster the firm’s family department.

Mark Moseley, managing director at Band Hatton Button, said: “Coventry is very much a city on the up and it has fast become an attractive destination for studying, working and visiting which is something we feel is going to build as we get closer to UK City of Culture in 2021 and with innovations such as driverless cars being developed on our doorstep.

“It’s for this reason that we have decided to inject long-term investment into our property departments.

“The property markets, particularly in the West Midlands, are bucking the wider national trend of slower property prices which is undoubtedly being driven by increasing demand for property in Coventry and Warwickshire.

“Band Hatton Button has gradually grown its workforce and has seen its team increase by approximately 30% in recent years, many of whom are long-serving and, by the New Year, we hope to have seen our workforce grow by another ten per cent which is very much in line with our future growth plans.”

Two newly-qualified lawyers join ranks

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Reading Time: 2 minutes A Coventry law firm’s investment in trainees has paid off after adding two newly-qualified lawyers to its ranks.