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In his Mini Budget, the former Chancellor announced a number of changes most of which have been reversed by the new Chancellor. One of the few to survive is a reduction in Stamp Duty Land Tax (SDLT) payable on property transactions in the UK. The new SDLT rates came into immediate effect on 23 September 2022.
When purchasing property, SDLT is paid on top of the sale price.
The previous rates were:
- 0% up to £125,000
- 2% on the next £125,000 (the portion between £125,001 and £250,000)
- 5% on the next £675,000 (the portion between £250,001 and £925,000)
- 10% on the next £575,000 (the portion between £925,001 and £1.5m)
- 12% on the remaining amount over £1.5m
Under the new rules, the nil threshold for SDLT has risen from £125,000 to £250,000 (removing the 2% bracket).
The new rates are:
- 0% up to £250,000
- 5% on the next £675,000 (the portion between £250,001 and £925,000)
- 10% on the next £575,000 (the portion between £925,001 and £1.5m)
- 12% on the remaining amount over £1.5m
For example, if a property worth £500,000 was purchased before 23rd September 2022, SDLT would be 0% on the first £125,000, 2% on the next £125,000 and 5% on the remaining £250,000, which totals £15,000. Under the new rules, SDLT would be 0% on the first £250,000 and 5% on the remaining £250,000, which totals £12,500.
SDLT benefits for first-time buyers
The nil threshold for first-time buyers has increased from £300,000 to £425,000.
The maximum price that a first-time buyer can pay and continue to be eligible for the first-time buyer relief has increased from £500,000 to £625,000.
SDLT – second homes and buy-to-lets
Second home or buy-to-let property purchases are subject to higher rates. However, these will also benefit from the change in rates.
The new rates for second homes are:
- 3% up to £250,000
- 8% on the next £675,000 (the portion between £250,001-£925,000)
- 13% on the next £575,000 (the portion between £925,001 – £1.5m)
- 15% on the remaining amount over £1.5m
Non-resident buyers purchasing residential property in England and Northern Ireland remain subject to an SDLT surcharge of 2%.
Trust Registration Service (TRS)
A reminder that since 1 September 2022, all UK express trusts must be registered with the TRS unless they are excluded. Please read Trust Registration Service: The new registration requirements for a detailed explanation of the new requirements.
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