Buyers in England have been boosted by a fresh cut to stamp duty confirmed in Chancellor Kwasi Kwarteng’s ‘mini-Budget’.
The Chancellor revealed that, from 23 September 2022, buyers will pay no stamp duty at all on the first £250,000 of a property’s purchase price – double the previous exemption threshold of £125,000.
First-time buyers, meanwhile, see their exemption threshold rise from £300,000 to £425,000, with first-time buyer relief able to be claimed on properties costing up to £625,000.
The Chancellor said: “Homeownership is the most common route for people to own an asset giving them a stake in the success of our economy and society, so to support growth, increase confidence and help families aspiring to own their own home I can announce that we are cutting stamp duty.
“The steps we’ve taken today mean that 200,000 people will be taken out of paying stamp duty all together. This is a permanent cut to stamp duty effective from today.”
What are the new rates of stamp duty?
The cut to stamp duty comes into effect right away.
If you’re an existing homeowner, or you’ve owned a property in the past, you’ll pay the following rates from September 23, 2022:
|
Portion of purchase price |
Stamp duty rate |
|
£0 – £250,000 |
0% |
|
£250,001 – £925,000 |
5% |
|
£925,001 – £1.5m |
10% |
|
£1.5m + |
12% |
If you’re a first-time buyer, you’ll pay:
|
Portion of purchase price |
Stamp duty rate |
|
£0 – £425,000 |
0% |
|
£425,001 – £625,000 |
5% |
First-time buyers purchasing a home costing more than £625,000 will pay the same stamp duty rates as other buyers.
Those buying second homes or investment properties when they already own a property elsewhere, meanwhile, will continue to pay a 3% stamp duty surcharge:
|
Portion of purchase price |
Stamp duty rate |
|
£0 – £250,000 |
3% |
|
£250,001 – £925,000 |
8% |
|
£925,001 – £1.5m |
13% |
|
£1.5m + |
15% |
How much stamp duty will I pay?
The examples below illustrate how much you will typically pay.
Example #1
Stephanie is selling her current property and buying a new home worth £500,000.
She’s not a first-time buyer, nor does she own an additional property.
Stephanie’s stamp duty bill works out as follows:
|
Purchase price |
Current stamp duty bill |
New stamp duty bill |
|
£500,000 |
£15,000 |
£12,500 |
Stephanie’s saving is: £2,500
Example #2
Kate is an existing homeowner but is buying a property for £200,000 to rent out as a
buy-to-let. Kate is not a first-time buyer but will now own two properties, meaning she’ll pay the additional home rate of stamp duty as follows:
|
Purchase price |
Current stamp duty bill |
New stamp duty bill |
|
£200,000 |
£7,500 |
£6,000 |
Kate’s saving is: £1,500
Example #3
Andy and Jessica are both first-time buyers purchasing a house together for £500,000.
Because they’re buying for the first time, they qualify for additional stamp duty relief up to £425,000, meaning their bill works out at:
|
Purchase price |
Current stamp duty bill |
New stamp duty bill |
|
£500,000 |
£10,000 |
£3,750 |
Andy and Jessica’s saving is: £6,250
