Islamic Mortgage penalties lifted from 2003

Islamic Mortgage penalties lifted from 2003

People taking out “Islamic-style” mortgages are no longer be faced with two bills for stamp duty on the same property after changes made by the Chancellor back in 2003.

Under sharia law, Muslims are not allowed to pay or receive interest, which makes it impossible to take out a standard mortgage without compromising their beliefs.

Instead of providing an interest-bearing mortgage, therefore, Islamic lenders purchase the property themselves, triggering the first stamp duty charge.

The customer agrees to a series of payments for a period of up to 25 years which includes purchase instalments and rent. The

This has made mortgage market fairer and more accessible to the Muslim community in the United Kingdom.

 

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