In September 2022 the Chancellor announced cuts to Stamp Duty (SDLT) rates in a bid to encourage growth within the housing market. The reductions were aimed at helping first-time buyers and single property homeowners looking to move, by making purchases more affordable.
When did the Stamp Duty rates change?
The changes were effective for property purchases taking place on or after 23 September 2022.
Who qualifies as a first-time buyer?
A first-time buyer is defined as an individual or individuals who have never owned an interest in a residential property in the United Kingdom or anywhere else in the world and who intends to occupy the property as their main residence. Property previously gifted or inherited will usually mean that the relief cannot be claimed. There is a small exemption for inherited property, but each case has to be looked at individually.
If there are joint buyers, both must be first-time buyers to enable the first-time buyer exemption to be claimed.
Stamp Duty rates for first-time buyers
First-time buyers paying £425,000.00 or less for a residential property will pay no Stamp Duty Land Tax (SDLT). A rate of 5% is payable on any portion of the property value between £425,001.00 and £625,000.00. First-time buyers purchasing property for more than £625,000.00 cannot claim the first-time buyer relief and normal single property rates will apply.
| Purchase Price | SDLT Rate |
| Up to £425,000 | Zero |
| £425,001 to £625,000 | 5% |
Stamp Duty rates for single properties
The residential nil rate tax threshold has increased from £125,000 to £250,000 meaning that no Stamp Duty is charged on properties up to £250,000. Over this value, the tax that is charged depends on both the purchase price and the nature of the buyers. Where the buyers are private individuals, are not first-time buyers and do not already own, or partly own, another property which is not being sold at the same time the following rates apply:
| Purchase Price | SDLT Rate |
| Up to £250,000 | Zero |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5 million | 10% |
| Above £1.5 million | 12% |
Higher Stamp Duty rates for additional properties
In the Autumn Statement of 2015, the Chancellor of the Exchequer increased the Stamp Duty rates for “additional properties” such as buy-to-lets and second homes. 3% was added to each of the bands applicable to single properties, increasing the rates to the following levels:
| Purchase Price | SDLT Rate |
| Up to £250,000.00 | 3% |
| £250,001.00 to £925,000.00 | 8% |
| £925,001.00 to £1.5 million | 13% |
| Above £1.5 million | 15% |
If the purchased property becomes the buyer’s main and only property within three years of the purchase, it may be possible to claim back this additional 3% Stamp Duty.
Other Stamp Duty considerations
Additional Stamp Duty rates also apply for non-UK residents. For full details of these rates, please visit Rates of Stamp Duty Land Tax for non-UK residents – GOV.UK (www.gov.uk)
Multiple Dwelling Relief and some other exemptions are not straightforward and require specialist tax advice before a decision can be made on whether any exemptions apply. For specialist areas like these we can refer our clients to a suitably qualified tax accountant.
How can we help?
When you use Backhouse Solicitors for your property sale or purchase, our friendly conveyancing team will give you all the information you need regarding the Stamp Duty you will pay as they guide you through your transaction. On the rare occasions that specialist tax advice is needed we can refer you to suitably qualified local experts who can help.
To find out more, or to get a quote for your next step on the property ladder, contact us today and speak to one of our friendly, expert property lawyers.
Tel: 01245 893400
Email: info@backhouse-solicitors.co.uk
Visit: 17 Duke Street, Chelmsford, CM1 1JU
Or send us a message through the Contact Us page on this website.
