When rumours started circulating that the new Chancellor of the Exchequer, Kwasi Kwarteng, had Stamp Duty Land Tax (SDLT) in his sights for his “mini budget”, conveyancers all across England started to panic that any reduction in SDLT would be on a time-limited basis similar to the stamp duty holiday announced in July 2020, which lasted until September 2021. Whilst the 2020/2021 stamp duty holiday energised the housing market to a level previously not seen, its impact is still being felt in the significant increase in property prices that resulted from it.
The Chancellor’s announcement on 23 September 2022 basically removed the 2% stamp duty band that had previously applied to that portion of residential property purchase prices between £125,001 and £250,000. The removal of that band now means that SDLT is not payable on the first £250,000 of any purchase. For properties being purchased for more than £250,000, the SDLT rate of 5% applies to that portion of the price from £250,001 to £925,000; 10% will be charged for a portion of the price from £925,001 to £1.5 million; and 12% will be payable for the remaining amount of the purchase price above £1.5 million.
There has also been change to the First Time Buyer’s Relief. Whilst the headlines focus on this being increased to £625,000; this is slightly misleading as that is just the maximum a first-time buyer can purchase a property for in order to be entitled to the relief. The relief itself only entitles first time buyers to 0% SDLT for the first £425,000 of the purchase price, with the standard 5% rate being payable on the remainder up to £625,000.
The changes to Stamp Duty Land Tax do not extend to non-residential and mixed-use property, nor does it remove the 3% Higher Rate Stamp Duty Land Tax surcharge payable on second properties.
At the point of writing, the HMRC SDLT calculator hasn’t been updated and, while we appreciate there are numerous third-party calculators that have been updated, we base all of our calculations of SDLT payable for purchases on the official calculator.
The new stamp duty rates will be reflected in our quotes once the Government calculator has been updated but in the meantime if you have any queries regarding SDLT and the amount payable for your transaction, please feel free to contact Farleys’ conveyancing team on 0845 287 0939, email us, or talk to us through the online chat below.
