The government announced a Stamp Duty cut, effective from Friday 23rd September 2022.
This means that you don’t need to pay Stamp Duty if the new home that you are completing on costs up to £250,000. Prior to this change, purchasers would’ve started paying Stamp Duty, if the property cost over £125,000.
However, you will only pay Stamp Duty at these rates, if after buying the property, it is the only residential property you own. You will usually have to pay 3% on top of the stamp duty rates if you own another property.
Purchasers who have exchanged on a property, but not yet completed will also benefit from the cut, as Stamp Duty is payable at the point of completion.
DO FIRST TIME BUYERS PAY STAMP DUTY?
If you're a first time buyer, you don’t have to pay any stamp duty if the property you buy is worth £425,000 or less. Prior to the introduction of the stamp duty cut, the limit for first time buyers was £300,000.
The maximum value of a property on which first time buyers' relief can be claimed has also risen from £500,000 to £625,000.
SO HOW MUCH IS STAMP DUTY? HERE'S AN EXAMPLE...
Previously, if you were completing on a property worth £300,000 you would've paid:
No Stamp Duty on the first £125,000
2% Stamp Duty on the £125,000 between £125,000 and £250,000 (£2,500)
5% Stamp Duty on the £50,000 between £250,000 and £300,000 (£2,500)
Totalling £5,000 in Stamp Duty.
Following the Stamp Duty cut, if you complete on a property worth £300,000 you will now pay:
No Stamp Duty on the first £250,000
5% Stamp Duty on the £50,000 between £250,000 and £300,000 (£2,500)
Totalling £2,500 in Stamp Duty.
WHAT ARE THE STAMP DUTY BANDS?
The table below shows how the property bands and rate of stamp duty works:
Property price
Stamp Duty rate
Up to £250,000
0%
£250,001 to £925,000
5%
£925,001 to £1.5 million
10%
Over £1.5 million
12%
SO WHAT NEXT?
If you're looking to buy a new home, have any questions about the financial and legal part of the home buying process, or have any other queries, then get in touch with our team today.
To read our buying guide on Stamp Duty, just click here.
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