On Friday 23rd September 2022, Chancellor Kwasi Kwarteng announced his first budget, with changes to stamp duty land tax (SDLT).
These changes, which took effect immediately, seen the threshold of the price of a house at which stamp duty becomes payable, rise from £125k to £250k, meaning stamp duty is not payable on the first £250k of a house purchase. In the case of first-time buyers, this threshold is even greater, with the first £425k of any house purchase being free from stamp duty tax.
How much stamp duty land tax will I pay?
The new thresholds are:
- 0%: £0 – £250,000 (or £0 – £425,000 for first time buyers*)
- 5%: £250,001 – £925,000
- 10%: £925,001 – £1,500,000
- 12%: £1,500,001 and over
At this time, it is assumed the changes are permanent as there has been no indication that this is a temporary change. Therefore, any future reductions in thresholds are likely to be given with some warning.
It is worth noting that there has, however, been no change to other SDLT rates, including the non-residential rates which apply to commercial and mixed-use transactions, the higher rate of 15% that applies to certain companies purchasing residential properties and the non-resident surcharge of 2% which is added to certain purchases of residential properties by non-UK residents. The additional 3% rates that apply to some purchases of second homes and by companies which qualify for relief from the higher rate also continue to apply, albeit now with an increased threshold for the lowest rate (as mentioned above).
Further information in relation to the changes in stamp duty land tax can be found at: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates?_gl=1*13gkues*_ga*MTY2OTk4ODQ4Mi4xNjU1MTA5MDA3*_ga_Y4LWMWY6WS*MTY2NDQ3NzExOS4xOTMuMS4xNjY0NDc3MTIzLjAuMC4w
If you would like to know more about this, please speak to a member of the McCay Solicitors team, Tel; 02871 371705.
Written By Our Associate, Charlene McGlinchey