Mini-Budget: What changes have been made to Stamp Duty Land Tax?
Further to budget announcements made by former Chancellor Kwasi Kwarteng, Chancellor Jeremy Hunt has announced new budget information on 17/10/22 however, there are no planned changes to Stamp Duty Land Tax (“SDLT”). For the latest budget information, click here.
As suggested, Kwasi Kwarteng confirmed that there will be a permanent change to the Stamp Duty Land Tax (“SDLT”) rates for acquisitions on residential property in England and Northern Ireland.
The changes, which take effect from today (23 September), increase the 0% threshold from £125,000 to £250,000, abolishing the 2% rate of SDLT that was payable on this amount. For a property with a purchase price of more than £250,000 you will be saving £2,500 in SDLT.
Whilst not clear at the time of writing, it is expected that for property purchasers where the surcharge rate applies, this increase in threshold will also apply, passing the same level of saving to those purchasing residential property in a company or as an individual where they hold an interest in more than one dwelling on completion.
For first time buyers, up until now where an individual qualified for First Time Buyers Relief then a 0% rate would be payable where the consideration was up to £300,000 with an exclusion from the rules should you buy a property worth more than £500,000. These thresholds have increased to £425,000 and £625,000 respectively meaning a potential SDLT saving of up to £11,250 depending on the purchase price.
How these changes will impact the property market is difficult to predict at this stage. However, the reduction in cost for those already in the process of purchasing residential property in England and Northern Ireland will no doubt be grateful for the reduction in costs in an already expensive process.
If you would like further information on SDLT, please get in touch.
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