Permanent change to Stamp Duty - what does this mean for you?
Last week the government delivered a “mini-budget” announcing a number of measures aiming to tackle the economic challenges the UK is facing.
Among the measures announced were significant – and immediate – changes to Stamp Duty Land Tax (SDLT) in England and Northern Ireland.
Stamp duty is a tax you pay when you buy a house. It’s organised in bands where the percentage of tax you pay increases according to the price of the property you’re buying.
The government announcement brings changes that mean around 200,000 people ‘will be taken out of paying Stamp Duty altogether’. So, what does this mean for you?
What has changed?
As of Friday 23rd September, a property must cost £250,000 before stamp duty is payable (this is up from the £125,000 threshold previously), so if you are buying a property that costs less than £250,000, you won’t pay any stamp duty at all. For the next £675,000, the rate is 5%. Here is an example:
You are going to buy a house costing £295,000. The Stamp Duty Land Tax you will have to pay will be calculated as follows:
• 0% on the first £250,000 =£0
• 5% on £45,000 =£2,250
• Total SDLT payable =£2,250
Are you a first-time buyer?
Th great news for you is that you won’t pay any stamp duty on the first £450,000 of you property purchase (this has increased from £300,000). In addition, first-time buyers will now get a tax discount on property purchases up to £625,000 (up from £500,000).
When do the changes start?
The changes came into effect on Friday 23rd September 2022 and these changes to stamp duty are permanent.
If you are buying a second home or the house you are purchasing is above £575,000 different rates apply, have a look at the Government advice on Stamp Duty Land Tax here.
Do you need advice on buying a property? Check out our useful Guide.
