In a bid to boost growth the Chancellor announced changes to Stamp Duty Land Tax (SDLT) or stamp duty in September’s mini-Budget.
He announced that the zero rate band for stamp duty on residential property purchases in England and Northern Ireland would be doubled from £125,000 to £250,000.
This change, from September 23, delivers a tax saving for any house purchases above £250,000 as they do not pay tax on the first £250,000 of the property value, only on amounts above this.
Previously they would have paid SDLT on all amounts above £125,000.
For those purchasing an additional dwelling, they will be subject to a three per cent higher rate of SDLT.
Bid to stimulate the market
In a bid to get the housing market moving, the threshold has risen from £125,000 to £250,000 on all properties, while the relief given to first-time buyers will increase from £300,000 to £425,000.
The maximum value of a property on which first-time buyers’ relief can be claimed has also increased from £500,000 to £625,000.
Any excess between £425,000 and £625,000 is subject to five per cent SDLT. First-time buyer relief is not available on properties over £625,000.
A 10 per cent rate applies to properties priced from £925,000 to £1,500,000 and 12 per cent for properties over £1.5 million.
Where surcharges apply
For those who are purchasing a second property or further properties, the extra three per cent surcharge applies. Anyone buying an additional residential property for £40,000 or more has to pay the surcharge, whether it’s a holiday home or a buy-to-let.
The surcharge increases for more expensive properties.
For example:
Property value SDLT rate
For landlords considering multi-property purchases, they can make SDLT savings by buying more cheaper properties with a lower stamp duty rate, rather than say a property above £1.5 million, where higher charges apply.
SDLT is a devolved issue for Scotland and Wales where separate rules apply.
Thinking of buying a property or multiple properties? Contact us today for advice on SDLT.
