In September 2023, chancellor Kwasi Kwarteng announced changes to rates of Stamp Duty payable on property purchases in England and Northern Ireland. Although tax cuts announced at the same time were subsequently withdrawn, the Stamp Duty changes remain in effect.
The new rates of Stamp Duty will mean less tax will be payable for some purchasers, with others not needing to pay any at all.
The reduction is intended to help first time buyers onto the property ladder as well as encouraging buyers and investors.
What is Stamp Duty?
Stamp Duty Land Tax, often referred to simply as Stamp Duty or SDLT, is a tax payable to HM Revenue & Customs on the purchase of a property. It needs to be paid within fourteen days of completion of the purchase. The amount payable is based on the value of the property as well as whether you are a first-time buyer and whether you are buying your main home or a second or subsequent property.
If Stamp Duty is not paid on time, you will be liable to pay a penalty. Your solicitor will generally deal with the payment on your behalf as soon as your purchase has been completed.
How much is Stamp Duty?
As from 23 September 2022, Stamp Duty is payable on properties purchased for more than £250,000. This means that if you buy a property for £250,000 or less, no Stamp Duty is payable. This is an increase on the previous threshold of £125,000.
Rates are now as follows:
| Portion of purchase price | Stamp duty rate |
| £0 – £250,000 | 0% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1.5m | 10% |
| £1.5m + | 12% |
This means that if you are buying a property costing £280,000 and you are not a first time buyer or buying a second or subsequent property, Stamp Duty will be calculated as follows:
0% on the first £250,000
5% on the remaining £30,000
Total Stamp Duty payable: £ 1,500
Stamp Duty rates for first time buyers
To help first time buyers purchase a home, no Stamp Duty is payable on the first £425,000 of the purchase price. This is an increase from the previous threshold of £300,000.
Where the price is between £425,000 and £625,000, Stamp Duty of 5% is payable on the part of the price in that bracket.
Mr Kwarteng said: “Homeownership is the most common route for people to own an asset giving them a stake in the success of our economy and society, so to support growth, increase confidence and help families aspiring to own their own home I can announce that we are cutting stamp duty.
“The steps we’ve taken today mean that 200,000 people will be taken out of paying stamp duty all together. This is a permanent cut to stamp duty effective from today.”
Stamp Duty rates for first time buyers are:
| Portion of purchase price | Stamp duty rate |
| £0 – £425,000 | 0% |
| £425,001 – £625,000 | 5% |
To be classed as a first time buyer, you cannot have owned any property previously, either in the UK or overseas. If you are buying jointly with someone else, they must also be a first time buyer.
Stamp Duty rates for second and subsequent properties
If you already own a property and are buying another one, the reduced rates will apply, however you will still be required to pay a surcharge of 3% as was the case before the changes.
This means that the rate of Stamp Duty payable on a second or subsequent property is:
| Portion of purchase price | Stamp duty rate |
| £0 – £250,000 | 3% |
| £250,001 – £925,000 | 8% |
| £925,001 – £1.5m | 13% |
| £1.5m + | 15% |
Contact us
If you would like to speak to one of our expert property lawyers, ring us on 0333 305 5189 or email us at info@lpropertylawyers.co.uk
