On 23rd September 2022 the Chancellor announced some significant changes to the amount of Stamp Duty Land Tax (SDLT) payable on homes in the United Kingdom. These changes could save homeowners thousands and make owning your dream home closer than you think.
Stamp Duty Land Tax is a charge made by the government in England and Northern Ireland payable on all home purchases. The amount of the tax is dependent upon the value of the property you purchase as well as other circumstances such as whether it is being purchased as a primary residence.
The changes that took effect on 23rd September affect the threshold for paying SDLT. For first time buyers the price that SDLT became payable increased to £425,000. For home movers the price increased from £125,000 to £250,000.
What does this mean for first time buyers?
If you are a first-time buyer and you have agreed a purchase price of £425,000, or less, then you will pay NO Stamp Duty.
If the purchase price is between £425,001 and £625,000 then you will pay no Stamp Duty on the first £425,000 but you will pay 5% on the remaining value.
Example:
Shruti is a first-time buyer purchasing a new home at our Little Green development in Aston Clinton. Shruti has agreed a purchase price of £495,000 so she will be required to pay:
|
|
SDLT payable |
|
On the first £425,000 |
£0 |
|
From £425,001 to £495,000 (£69,999) |
£3,499.95 |
|
Total SDLT payable |
£3,499.95 |
However, if the purchase price Shruti had agreed was above £625,000 then she would not be able to claim the tax relief and would revert to the normal SDLT levels.
What does this mean for home movers?
If you are moving home then you will not pay any SDLT on the first £250,000 of your agreed purchase price. You will pay a varying amount of SDLT on anything above this rate. The table below shows the rates of SDLT payable.
|
Property Value |
SDLT rate |
|
Up to £250,000 |
0 |
|
From £250,001 to £925,000 (ie., the next £675,000) |
5% |
|
From £925,001 to £1.5 million (ie., the next £575,000) |
10% |
|
Any amount above £1.5 million |
12% |
How is SDLT paid?
Usually, your solicitor will deal with the payment of SDLT on the day of completion and you will reimburse them via your fees.
Alternatively, you can complete and send an SDLT return to HMRC paying the full amount required but this must be done within 14 days of completion.
Search for your new Shanly home and then use the handy SDLT calculator on the government website to calculate how much SDLT is payable.
