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    A Brief Overview

    – Nil-rate threshold doubles from £125,000 to £250,000

    – The nil-rate threshold for first-time buyers increases from £300,000 to £425,000

    – First-time buyers can claim relief on properties up to £650,000 (was £500,000)

    – First-time buyer relief is not available on properties over £650,000

    – For BTL landlords and second homes, an additional 3% charge has been added on top of the standard rates

    • 0% SDLT

      Standard Rate for Properties <£250,000
    • 0% SDLT

      FTB Rate for Properties <£425,000
    • 3% SDLT

      BTL Rate for Properties <£250,000

    What is Stamp Duty?

    Stamp Duty is a tax that a buyer must pay when purchasing property or land. The stamp duty rates vary depending on the value of the property. After the conveyancer files a Stamp Duty Land Tax return, the payment is due within 30 days of completion.

    The tax applies to the following:

    – Freehold properties

    – Leasehold properties

    – Shared ownership homes

    – Residential and commercial properties

    – Land

    Previous Rates:

    Threshold Rate
    Up to £150,000 0%
    £125,000 – £250,000 2%
    £250,001 – £925,000 5%
    £925,001.- £1.5m 10%
    Over £1.5m 12%

    What’s Changed? 

    During the pandemic, the Stamp Duty Land Tax ban encouraged market activity and drove sales. This initiative propelled the momentum in the market throughout the pandemic when many business sectors were struggling. However, the issue the property market persistently faces is the shortage of homes available. As a result, the market is unable to keep up with the ever-inflating demand.

    To encourage homeownership, the thresholds of Stamp Duty charges on residential property have changed. As part of the government’s Growth Plan, the Chancellor abolished the 2% stamp duty land tax for residential property and doubled the nil-rate threshold to £250,000. Initially, there was a 2% stamp duty land tax on properties between £125,000 and £250,000.

    For first-time buyers, the nil-rate threshold has risen to £ 425,000, positive news for first-time buyers who will essentially dodge any Stamp Duty charges on a property up to the value of £425,000. The stamp duty reduction on the residential property came into place almost immediately on 23 September 2022. 

    For buy-to-let landlords, and second-home buyers, an additional 3% charge has been added on top of the standard rates. Therefore, if you are buying a home up to the value of £250,000, a 3% SDLT charge will be applied.

    New Rates:

    New Rates:

    Threshold Rate
    Up to £250,000 0%
    £250,001 – £925,000 5%
    £925,001 – £1.5m  10%
    Above £1.5m 12%

    Rates for First-time Buyers:

    First Time Buyers Rate
    Up to £425,000 0%
    £425,001 – £625,000 5%

    BTL / Second Home Rates:

    Threshold Rate
    Up to £250,000 3%
    £250,001 – £925,000 8%
    £925,001 – £1.5m  13%
    Above £1.5m 15%

    CityRise Verdict

    Another incentive delivered by the government, but will it be as successful? Will the change leave a positive influence, or will it lead to a disastrous market crash?

    Doubling the threshold for the nil-rate tax will inevitably draw more people to consider purchasing a property. As a result, this will heighten demand for properties in the market. The elevated levels of demand, coupled with the limited supply of houses available, will enhance competition in the market. Thus, driving property prices upwards. The move to encourage homeownership will spark activity in the market. This permanent change will positively influence the property market, driving the economy and strengthening the property market.


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