Stamp duty changes

Three stamp duty changes were announced today:

• The threshold of how much a property has to cost before stamp duty is paid has been doubled from £125,00 to £250,000.
• The level at which first-time buyers have to start paying stamp duty from has been increased from £300,000 to £425,000.
• And, first-time buyers can access the relief when they buy a property costing less than £625,000 – up from properties worth £500,000 

These cuts are permanent and effective immediately.

Paula Higgins, Chief executive of HomeOwners Alliance said, ‘The Chancellor’s announcement is much needed good news for first time buyers. These stamp duty changes mean more people will be able to afford to get on the property ladder.

It’s especially welcome at a time when interest rates are driving up the cost of borrowing. Government has also reaffirmed its commitment to homeownership today. We agree it is critical: homeownership shouldn’t be for the richest in society, but achievable for everyone. This tax cut is a step in the right direction.

The fact the change is permanent and starts today is particularly welcome as it will avoid the chaos of the previous stamp duty holidays. It means those who had put their move on hold earlier this week when speculation began can now crack on with their exchange and completion.

The government has taken on board the  recommendations of our study earlier this year which found almost a third more first-time buyers are having to pay stamp duty than they were five years ago. One in four of all first-time buyers now pay stamp duty. We are glad the government has listened and responded with reforms to the way the tax is applied to first time buyers.

We will continue to campaign to scrap stamp duty for those who are buying homes to live in.

What is Stamp Duty?

Stamp Duty is a tax you pay when you buy a property in England and Northern Ireland. The amount you’ll pay depends on the price of the property and also if you’re a first time buyer or purchasing a second home or buy to let.

What does the Stamp Duty change mean for homebuyers?

Before this announcement, if a first-time buyer purchased a property at the average London house price of £543,500, they would have faced a Stamp Duty bill of £17,175.

Under the new rules they’ll pay £5,925

This is a saving is £11,250

While if a standard homebuyer was purchasing a house at the average England house price of £312,000. Under the old system they’d pay £5,600 while now they’ll pay £3,100. A saving of £2,500.

Stamp duty calculator

Stamp Duty Calculator for England & NI, Scotland and Wales

1. Where is the property you are buying?

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2. Enter your property price

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Please enter a value for your property over £10,000

3. Are you a first time buyer?

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4. Are you a UK resident?

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5. Will the purchase of the property result in owning two or more properties?

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5. Is it an investment property?

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6. Is the property being purchased replacing your main residence?

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Calculate Stamp Duty

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What if I’m buying a second home or a buy to let?

You will still benefit from the stamp duty changes. But you’ll also still have to pay the 3% stamp duty surcharge if you’re buying an additional property. See our guide on stamp duty on second homes for more information.

What if I’ve already exchanged contracts?

Stamp duty is payable on completion so if you’ve exchanged but not yet completed, you will benefit from the changes announced today.

Other major changes announced in today’s “mini budget” include:

– The basic rate of income tax will be cut by 1p to 19p from next April

– The additional rate of tax for those earning over £150,000 will be abolished from next April

– Planned rise in corporation tax from 19% to 25% has been scrapped

– The government will also set out plans to unlock homeownership. This includes ambitions to increase housing supply with planning reforms and by increasing the disposal of surplus government land to build new homes.

– And the government is cancelling the Health and Social Care Levy. This was initially introduced via a 1.25% rise in National Insurance contributions (NICs) – which took effect in April 2022.

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Angela Kerr Director, Editor

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