Stamp Duty Update

The Chancellor of the Exchequer, Kwasi Kwarteng, has announced a cut in Stamp Duty Land Tax (SDLT) as part of the recent ‘mini-budget’. Unlike the SDLT holiday announced during the early stages of the COVID-19 pandemic, the Chancellor has confirmed that the new rates are a permanent fixture, effective immediately.

The key points to note are as follows:

• The SDLT threshold, being the level at which house-buyers begin to pay SDLT, has doubled from £125,000 to £250,000.
• First-time buyers will pay no SDLT on homes worth £450,000, up from the previous threshold of £300,000.
• Before today’s announcement, SDLT relief was not available to any first-time buyer purchasing a home priced over £500,000. This threshold has now been raised to £625,000.

The new SDLT rates for residential property are summarised below:

• £0 - £250,000 (£425,000 for first time buyers) = 0%
• £250,000 - £925,000 = 5%
• £925,000 - £1,500,000 = 10%
• £1,500,000+ = 12%

It should be noted that the new rates apply to residential property in Northern Ireland and England only and the higher rate of 3% will remain payable on additional properties. The rates applicable to commercial property have not changed.

The Chancellor has commented that the SDLT cut will relieve up to 200,000 people from SDLT liability altogether. He estimates that the new measures “will reduce stamp duty bills across the board for all movers by up to £2,500, with first-time buyers able to access up to £11,250 in relief.”

If you are buying, selling or letting residential or commercial property and would like further information, please contact Andrew McWilliams or your usual contact within our Real Estate team.

**This information is for guidance purposes only and does not constitute, nor should be regarded, as a substitute for taking legal advice that is tailored to your circumstances. Solicitors are not qualified to provide tax advice. You should always seek the advice of your tax advisor with regards SDLT.