For property purchases valued at between £300,000 and £500,000 the stamp duty rate will be 5% on the amount of the purchase price in excess of £300,000. In the case of a couple both people have to be first-time buyers.

The measure will cost £560m in 2018-19 alone with the projected cost of this change to stamp duty expected to reduce Exchequer take by  £610m a year by 2020-21.

The Chancellor Philip Hammond had been under intense lobbying to introduce a temporary removal of stamp duty for first-time buyers but wanted a more long-term solution to help those struggling to get on the property ladder, particularly as the number of first time buyers under 35 had fallen dramatically.

He said that he wanted ‘the dream of home ownership [to] become a reality in this country once again. But I also want to take action to help young people who are saving to own a home. One of the biggest challenges facing young first-time buyers is the cash required up front. We have put £10 billion more money into Help to Buy equity loan to help those saving for a deposit.’

For those buying the more expensive properties this equates to a potential saving of £5,000 compared to the amount of SDLT they would have previously paid, and is £1,500 for up to £300,000 properties.

A first time buyer is defined as an individual or individuals who have never owned an interest in a residential property in the UK or anywhere else in the world and who intends to occupy the property as their main residence.

First time buyers purchasing property for more than £500,000 will not be entitled to any relief and will pay SDLT at the normal rates.

The relief must be claimed in an SDLT return.

The relief does not apply to the purchase of non-residential or mixed use properties. A mixed-use property is one which includes both residential and non-residential elements, such as a shop with a flat above.

The relief does not affect the amount of SDLT which may be payable on the net present value of any rent payable under a lease. The relief must be claimed on a land transaction return, or an amendment to a return, by entering code 32 in the appropriate field of the return.

This measure will have effect for transactions with an effective date (usually the date of completion) on or after 22 November 2017.

This measure does not apply in Scotland. SDLT was devolved to Scotland on 1 April 2015. This measure will apply in Wales until 1 April 2018, when SDLT will be devolved to Wales.

Nimesh Shah, partner at Blick Rothenberg, warned: ‘Watch out joint buyers, both need to be ‘first time buyers’ to qualify for the SDLT cut. If one has previously had an interest in a property, they will not be eligible. A person coming to the UK will not be eligible for the SDLT cut if they have previously owned a property anywhere in the world.’

The Treasury impact statement said that one of the effects of the measure would be a rise in house prices, stating: ‘This measure is expected to lead to a small increase in house prices in the first year after implementation.’

According to research by HouseSimple based on Zoopla data covering 80 major UK towns and cities, 49.6% of properties currently for sale will now be stamp duty exempt for first time buyers.

The policy paper Stamp Duty Land Tax: relief for first time buyers, published 22 November 2017