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Mini Budget: Stamp Duty Threshold Changes Explained
Today the Chancellor announced more welcomed changes to Stamp Duty payments to help more people move, promote residential investment, and boost first-time buyer ownership. The best news is these changes start from today and are permanent cuts.
Under the changes announced, homebuyers will no longer pay Stamp Duty Land Tax (‘SDLT’) on the first £250,000 (raised from £125,000) in England and Northern Ireland when purchasing a main residence.
For First Time Buyers the threshold has been raised to £425,000 (from £300,000). The value of a property for which First Time Buyers can claim relief will also increase from £500,000 to £625,000.
What is Stamp Duty Land Tax?
SDLT is a tax payable by homebuyers purchasing a property in England and Northern Ireland. The amount of stamp duty due depends on the price of the property and is payable on both freehold and leasehold properties.
What does the Stamp Duty change mean for homebuyers?
Any homebuyer who is purchasing a main residence up to the value of £250,000 will not pay any SDLT with immediate effect.
Any homebuyer who is purchasing a property over £250,000 will still pay SDLT but this will be a reduced amount under the changes announced.
For First Time Buyers the threshold has been raised to £425,000 (from £300,000). This means no SDLT will be payable up to the value of £425,000.
The value of a property for which First Time Buyers can claim relief will also increase from £500,000 to £625,000. Between £425,001.00 and £625,000.00, SDLT is payable at 5%.
What about buyers purchasing a second home or an investment property?
The Stamp Duty changes will also benefit homebuyers purchasing second homes/investment properties. however, buyers will still have to pay the second property surcharge.
What if homebuyers have already exchanged contracts?
As stamp duty is payable on completion, if buyers have already exchanged but not yet completed, they will benefit from the changes announced today.
View more information on Residential Property Conveyancing here. To get in contact with our team please fill in the form in the sidebar of this page. Alternatively, you can call us on 01453847200.