Stamp duty threshold increase – how will this help you?
Friday 7 October, 2022
What is Stamp Duty
When buying a property, the purchaser will need to pay a tax called ‘Stamp Duty Land Tax’ (SDLT). The amount of money that needs to be paid will depend on the price of the property, and if the purchaser is a first-time buyer or UK resident.
In the latest mini-budget statement from the new chancellor, Kwasi Kwarteng, it was publicised that the stamp duty threshold would be raised. The stamp duty that home movers will need to pay has risen from £125,000 to £250,000. The help for first time buyers has risen from £300,000 to £425,000.
Stamp duty for first time buyers
This will be good news for those looking to move or for first time buyers getting on to the property ladder.
The change in stamp duty is anticipated to help first time buyers by approximately £5,000. This will potentially benefit up to 200,000 new purchasers from paying any stamp duty at all, which is very good news.
The changes to the stamp duty rates also means that first-time buyers are able now claim the First Time Buyer Relief on their new main residence up to a maximum purchase price of £625,000, this is an increase from £500,000.
Example stamp duty saving
Under the previous stamp duty rules, a first-time buyer paying a purchase price of £450,000 for their new property would have paid £7,500 in SDLT. Under the new policy, the SDLT is reduced to £1,250.
The first-time buyers stamp duty rates
|
Stamp Duty Brackets |
Standard Rate |
|
£0 – £250,000 |
0% |
|
£250,001 – £925,000 |
5% |
|
£925,001 – £1.5 million |
10% |
|
Over £1.5 million |
12% |
Second home / buy to let stamp duty
|
Stamp Duty Brackets |
Buy-to-let/second home rate |
|
£0 – £250,000 |
3% |
|
£250,001 – £925,000 |
8% |
|
£925,001 – £1.5 million |
13% |
|
Over £1.5 million |
15% |
Gulay Dugunyurdu, Mortgage Broker Adviser in Enfield, East & North London said:
“These new changes to the stamp duty rates will be good news for residential movers and first-time buyers. Any savings will are welcome. It is also important to factor in the cost-of-living levels, so it will be vital to speak with a professional mortgage broker to match the benefits of the stamp duty changes with the most appropriate first-time buyer mortgage.
We always encourage first time buyers or those looking to remortgage to call us as soon as possible on 01707 872000. We can help to find them the mortgage deal most suitable to their financial situation. It is always worth remembering that most mortgage offers last for up to six months, so you can arrange it now, ready for when you need it.”
