Chancellor Kwasi Kwarteng today announced a significant change in the overhauling of UK stamp duty land tax (SDLT). Whilst not taking the cuts as far as some homebuyers would have liked, the changes will mean welcome savings in particular for first time buyers.
The policy is part of the new government’s plan to ‘drive economic growth’ and aims to stimulate the housing market. It’s likely to lead to higher demand for property, while supply may also increase if an active market encourages more people to sell.
Today’s emergency mini-Budget, the first since Liz Truss was named as prime minister, focused on the government’s response to the cost of living crisis.
The minimum threshold for SDLT has doubled from £125,000 to £250,000 with immediate effect. The rates however will not change, and remain at their previous rates for properties over the value of £250,000. Except for first time buyers who will be exempt from SDLT for properties purchased up to the value of £425,000.
First time buyer savings
Those looking to set foot on the property ladder, have seen the stamp duty exemption shift from £300,000 to £425,000 in a move which is set to delight those looking to buy their first property in the capital.
The last stamp duty reform which was dubbed a ‘holiday’ was in 2020 and saw a stampede of buyers try and get their mortgages over the finish line before the deadline ended, in what was seen as a short term solution to the inflated housing market during the pandemic.
Homeowners looking to move
The new stamp duty thresholds still remain fairly high for those looking to buy expensive homes, but they do see a saving of £2,500. The first £250,000 is tax-free for buyers and amounts over that are charged at 5% until the 10% threshold kicks in at £925,000. From £925,001 to £1,500,000 stamp duty will be charged at 10%; any property purchase above £1.5m will be charged at 12%.
Landlords and second home owners
Buy-to-let landlords and potential second home owners will still have to pay the customary 3% SDLT surcharge, it hasn’t yet been confirmed whether or not buy-to-let landlords will benefit from the tax cut.
Alongside the stamp duty cuts was a corporation tax freeze, which will be welcome news for landlords who own their properties through limited companies, as they won’t be hit with a higher tax bill.
Looking to maximise the stamp duty savings and make your move?
If you’re looking to make your move, and are not in talks with a mortgage adviser as of yet, book an online appointment with Tony or start the process yourself with our online mortgage sourcing tool. Skyline Mortgage Consultants have a 5-star Google review rating and are highly recommended by many happy Londoners.
Whether you’re a first time buyer or looking to maximise the opportunity with the new Stamp Duty rate changes, we can help you get a foot in the door. You can also read our guide to improving your credit rating to start making improvements to your credit score as early as possible in the mortgage process.
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