The mini-budget announced on Friday (23rd September 2022) has increased the price thresholds before stamp duty has to be paid. This includes scrapping stamp duty on the first £250,000 and increasing the threshold for first-time buyers to £425,000.
If you are thinking of buying property in London or Manchester, this will reduce the amount of stamp duty you will pay meaning it will help you put more towards a higher deposit and therefore reduce your mortgage repayments.
What changes were introduced to stamp duty rates?
Stamp duty is a tax added to the purchase price of a property and therefore increases the amount a buyer has to pay.
From 23 September 2022, new stamp duty rates on residential property purchases in England came into effect. We have included a summary below and you can visit the Gov.uk website for more information about the updated Stamp Duty Land Tax (SDLT) rates.
New Stamp Duty Rates from 23 Sep 2022
Property Purchase Price |
SDLT – Normal rate | SDLT – Additional Property |
|---|---|---|
| Up to £250,000 (increased from £125,000) | Zero | 3% * |
| The next £675,000 (the portion from £250,001 to £925,000) | 5% | 8% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 10% | 13% |
| The remaining amount (the portion above £1.5 million) | 12% | 15% |
| * An additional property purchased for less than £40k will attract 0% tax. For purchases from £40k to £250k the SDLT rate will be 3% on full purchase price. | ||
Relief for First Time Buyers from 23 Sep 2022
- No SDLT up to £425,000 (increased from £300,000)
- 5% SDLT on the portion from £425,001 to £625,00 (increased from £500,000)
“These measures will reduce stamp duty bills across the board for all movers by up to £2,500 with first-time buyers able to access up to £11,250 in relief.” the Chancellor of the Exchequer, Kwasi Kwarteng, announced in his mini budget. “The steps we have taken today mean that 200,000 more people will be taken out of paying stamp duty altogether”.
How does this benefit buyers and investors in London & Manchester?
This new reduction in stamp duty means you now have more money in your pocket to spend on properties in London & Manchester as you will not be using part of your funds to pay this tax. This measure will be of most benefit to those looking to buy or invest in property in London & Manchester, as property prices in these areas are more likely to be near the new thresholds.
This stamp duty cut is also good for investors. As well as lowering your investment costs, it also demonstrates the continuing support by the government for the property market.
What are the benefits for first-time buyers?
The majority of first-time buyers in London and Manchester will end up paying less stamp duty under the new rates, and could save up to £11,250 according to the Chancellor.
First-time buyers can also still avail of the 5% deposit mortgage scheme announced in the April 2021 budget, meaning you can get a mortgage with a deposit of just 5% under this government guarantee scheme. This makes even more funds available to you to look for the property of your choice.
How can Henry Wiltshire help me take advantage of these measures?
These new thresholds mean that buyers and investors in London & Manchester are in prime position to benefit from the new stamp duty rates. With Henry Wiltshire offices located across London and in Manchester, our experts are ready to help you find the property you have been looking for.
Find out more in our advice for buyers, or get in touch with us today. Our agents use their expertise and local knowledge to get you your property quickly, with professionalism and award-winning customer service.
