What will the Stamp Duty Changes mean for you?

On the 23^rd of September 2022, the UK Government announced that there would be changes to the current Stamp Duty Land Tax (SDLT) thresholds with immediate effect. The measure was implemented as part of the Government’s commitment to support homeownership and to promote mobility in the housing market, and appears to be a permanent measure for anyone who is moving home. A few days later, the Welsh Revenue Authority also announced similar changes to the Land Transaction Tax (LTT) which applies to Welsh property purchases.

These changes will leave many purchasers with more money back in their pocket as they look to move home. The changes affect only the basic rate of tax – the higher rate for second homes will continue to apply to the full purchase price.

SDLT Changes – affecting the purchase and transfer of properties in England

The announcement saw the SDLT nil-rate threshold raised from £125,000 to £250,000.  This could mean a saving of up to £2,500, due to the removal of the 2% which was payable between £125,000 and £250,000. The limits above this remain unchanged and will remain payable.

In addition, the threshold up to which first-time buyers are able to obtain relief has been increased from £300,000 to £425,000.  And the maximum purchase price for First-Time Buyer Relief has been increased from £500,000 to £625,000. This means that eligible first time buyers will pay no SDLT at all on any purchase up to £425,000, and just 5% on any amount between £425,000 and £625,000. This could mean a potential saving of up to £6,250.

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LTT Changes – affecting the purchase and transfer of properties in Wales

In Wales changes to the Land Transaction Tax came into effect on the 10^th of October 2022. The Welsh Government increased the LTT threshold from £180,000 to £225,000 creating a saving of up to £1,575. However, any element of the purchase price between £225,000 and £400,000 will now be taxed at 6%, which is an increase on the previous rates of between 3.5% and 5%.

Numbers can be a lot to digest, and if you have any questions on how this will affect your next purchase you should not hesitate to speak to your solicitor who will be able to provide a calculated breakdown for you.

If you are looking to take advantage of the potential savings then please do not hesitate to contact Poole Alcock on 0800 470 0336. Our award-winning conveyancers would be delighted to help you.