In yesterday’s mini-budget, the Chancellor of the Exchequer Kwasi Kwarteng announced widespread reductions to the Stamp Duty Land Tax.
Effective immediately, the SDLT nil-rate band has been doubled, increasing from £125,000 to 250,000 and abolishing the previous rate of 2%. This means that under the new rules buyers will not pay Stamp Duty on the first £250,000 of a property purchase. For properties with a purchase price of more than £250,000, existing rates will still apply, as set out below:
|£0 - £250,000||0%|
|£250,001 - £925,000||5%|
|£925,001 - £1.5 million||10%|
|£1.5 million and above||12%|
Additionally, the nil-rate threshold for first-time buyers has been raised from £300,000 to £425,000. The maximum value of a property on which First-Time Buyers’ Relief can be claimed has also been increased – from £500,000 to £625,000.
The new stamp duty rates are designed to stimulate the UK property market by increasing residential investments, providing support for the property industry and boosting spending on household goods. The changes are expected to benefit all homebuyers, with an estimated 200,000 more people each year exempt from paying any Stamp Duty at all. The average buyer will make a saving of £2,500, with first-time buyers potentially saving up to £11,250, depending on the property purchase price.
Kiri Kkoshi, Head of Real Estate at Healys LLP, says:
“Given the current economic climate and rate of inflation the recent reduction in Stamp Duty is a sensible move that will be welcome news for many; particularly first-time buyers. It is however too soon to predict the effect these measures will have on the property market as a whole. With the cost of living on the rise, and interest rates at their highest since 2008, many buyers are exercising a degree of caution when it comes to purchasing property; and it remains to be seen whether the recent cuts to SDLT will provide the same level of stimulus as we saw following the Stamp Duty Holiday of 2021.”
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