A permanent stamp duty cut has been confirmed following Chancellor Kwasi Kwarteng’s mini budget announcement on the 23rd of September 2022. The government is restructuring Stamp Duty Land Tax (SDLT) by raising the level at which it is paid from £125,000 to £250,000. Focus has also been put on helping first-time buyers get on the property ladder. Firstly, by increasing the level first-time buyers start paying stamp duty from £300,000 to £425,000.
Additionally, the chancellor also increased in the value of the property on which first-time buyers (FTB) can claim stamp duty relief from £500,000 to £625,000.
With these changes, The Rt Hon Kwasi Kwarteng has suggested that this permanent cut could save around 200,000 people from SDLT each year.
What are the new SDLT rates?
The new rates are now:
- 0%:£0 – £250,000 (£425,000 for first time buyers)
- 5%:£250,000 – £925,000
- 10%:£925,000 – £1,500,000
- 12%:£1,500,000+
The reform on rates means that the tax on a property purchase in England or Northern Ireland will be reduced by up to £2,500 (if the price is more than £250,000, or less if the price is between £125,000 and £250,000). For first time buyers (FTB), tax will fall by up to £11,250 (if the price is between £500,000 and £625,000, with those buying for between £300,000 and £500,000 gaining less). Whilst most will see this as a welcome tax reduction and hopefully encourage a more buoyant housing marketing, there has been some criticism on certain downsides of the first-time buyers’ relief. Specifically, the seemingly unfair difference in tax FTB will have to pay beyond this point. For example, someone buying their first property for £625,001 will pay £8,750 more tax than someone buying for £625,000.
For more information about the updates to SDLT, including how the changes are set to grow the economy, read the government’s Stamp Duty Land Tax Factsheet.
The Government website also has a stamp duty calculator tool to help you work out how much you might pay.
How to get Conveancing Advice
For most, buying a property can be highly stressful, especially for first time buyers. Our specialist residential conveyancing solicitors in Kingston upon Thames, will take time to explain the transaction to you in clear language, keeping you informed, and guiding you through the process, every step of the way. Do you need a conveyancing quote? Find out about our costs here, or contact us below for a quote.
This blog post is not intended to be taken as advice or acted upon. If you are seeking legal advice, please contact our team of solicitors
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