Friday, 23rd September 2022
On 23rd September 2022, the Government announced a cut to stamp duty in a bid to help house buyers. The threshold at which the tax falls is set to double from £125,000 to £250,000. Meanwhile the threshold for first-time buyers has increased from £300,000 to £425,000. This will come as welcome news for many people looking to move to a new home, especially first-time buyers, reducing the amount of tax you will pay on your first purchase.
So, what is Stamp Duty?
In England and Northern Ireland, stamp duty land tax or SDLT for short, is a levy on home and land purchases. It is a cost that buyers have to pay if the transaction value exceeds a certain amount. It is calculated as a percentage of the purchase price, in bands.
How much stamp duty will I pay?
Those spending £250,000 on a property in England or Northern Ireland will avoid paying £2,500 in stamp duty charges. Previously before the announcement this was charged at 2% between £125,000 and £250,000.
Anyone other than first time buyers spending £300,000 on a property will now be charged £2,500, rather than the previous eye watering cost of £5,000. The portion of the price from £250,001 to £925,000 incurs 5%, with a 10% increase on properties valued between £925,001 to £1.5 million.
For first time buyers there is slight relief, as anyone spending less than £425,000 will no longer have to pay stamp duty, making that first step on the ladder much more attainable. Stamp duty only kicks in for first time buyers when a property is purchased between £425,001 to £625,000, incurring a 5% taxation on the purchase price.
Our table below highlights the new stamp duty rates for non first time buyers.
|Property Price||Stamp Duty Land Tax|
|Up to £250,000||0|
|250,001 to £925,000||5%|
|£925,001 to £1.5 million||10%|
|Above £1.5 million||12%|
When will the stamp duty cut come into effect?
The changes to stamp duty are effective immediately, from today, 23rd September 2022.
Will the stamp duty cut affect Wales?
Unfortunately the stamp duty cut will not affect Wales. The taxation rules on property in England and Northern Ireland are separate from those in Wales and Scotland.
What does our CEO, Gwyn Jones think about the stamp duty cut?
“We welcome the news of the stamp duty change, particularly with regards to first-time buyers. We encourage the Welsh Government to follow suit in matching today’s announcement, allowing buyers across the UK to benefit from the savings. It’s crucial that the government continues to focus on the importance of house building for the economy, and doesn’t use today’s announcement as a plaster over fundamental cracks in the housing market. Castle Green would welcome further reform to the planning process and beyond in order to boost economic growth.”