The changes to stamp duty explained

News at Musker McIntyre | 20/10/2022

Most of the former chancellor, Kwasi Kwarteng’s mini-Budget, may have been reversed
since it was introduced three weeks ago. But the good news for first-time buyers and
homeowners looking to step up the ladder is that the Stamp Duty cut remains.

More stamp duty savings for first-time buyers
New chancellor Jeremy Hunt confirmed this week (Mon 17 th ) that although proposed
changes to the basic rate of income tax, an increase to corporation tax, and a two-year
freeze on the energy cap have now been consigned to recent history, first-time buyers won’t
pay any stamp duty land tax (SDLT) on a property if it costs £425,000 or less.
Previously the threshold for stamp duty payments in England and Northern Ireland for first-
time buyers was £300,000. First-time buyers can also claim relief on properties worth
£625,000 or less (up from £500,000).

Second steppers will also benefit from changes
And it’s not only first-time buyers who benefit, the changes are more generous for those
looking to upsize too. Now, stamp duty doesn’t have to be paid for properties at £250,000 or
less (previously, it was £125,000). Stamp duty of five per cent is due on property priced at
£425,001, meaning someone who purchases a house for £500,000 will only pay stamp duty
on around £75,000 (before the mini-budget, stamp duty would have been due on £250,000).

The value of a property on which first-time buyers can claim relief also increased from
£500,000 to £625,000. Previously, first-time buyers purchasing a property worth over
£500,000 followed the same stamp duty rules as everyone else, meaning they still had to
pay tax on values over £125,000.

Nearly half of homes have no stamp duty due
According to property portal Zoopla, it means nearly half (43 per cent) of houses for flats it
has for sale now no longer attract any stamp duty. This obviously makes them more
attractive to buyers.
The stamp duty cuts are an attempt to stimulate the slowing property market now that
mortgage interest rates are rising and the cost of living is beginning to bite.
@MoneySavingExp: “Stamp duty becomes payable once you complete on your property.
Completion is the point at which you receive the keys to the property and legally become the
In England and Northern Ireland, you'll need to pay HM Revenue & Customs (HMRC) any
stamp duty you owe within 14 days of completion.”
If you’re looking to buy a home in Scotland or Wales, check that country’s government
website. That’s because the mini-budget changes to stamp duty were only applicable in
England and Northern Ireland. Wales changed its stamp duty charges earlier this month
(Oct). It increased the threshold for Land Transaction Tax from £180,000 to £225,000.
Scotland’s Land and Buildings Transaction Tax threshold is the lowest, at £145,000, but it’s
believed this will change in April next year.

Get in touch
Are you a first-time buyer and wondering how much you’ll save with your first purchase in
East Anglia? Then contact our team here at Musker McIntyre for advice. We are one of the
leading property firms in the area – and have been for four decades now.