Stamp Duty following the mini budget
The government has recently announced changes to residential stamp duty as part of the mini-budget in September and we highlight some of the changes below. The amendments made are permanent, so are different to the stamp duty holiday that was imposed during the Covid 19 pandemic in 2020 and 2021.
Stamp duty is a tax that is paid on the purchase price of a property and is a cost borne by the buyer. It is estimated that the government’s annual take from stamp duty is £14 billion, so any changes need to be carefully reviewed.
The threshold at which stamp duty is payable has been increased, meaning that the first £250,000 of any purchase is free from stamp duty. This has risen from the previous threshold of £125,000 and means that buyers will save a maximum of £2,500. Buyers will pay 5% on the value between £250,001 - £925,000, and 10% between £925,001 and £1.5million.
The rules have also changed for first time buyers who already benefited from a first time buyer relief meaning that the first £300,000 of any purchase was free from stamp duty. The mini budget has increased this to £425,000. This is applicable on properties up to a value of £625,000, which is an increase from £500,000.
These changes are immediate and so if you are in the process of a buying a property it is vital to speak to your solicitor to see if the changes impact you.
A stamp duty land transaction return will still have to be completed and submitted to HMRC for any transaction over £40,000.00. Stamp duty has to be paid within 14 days of completion, if not HMRC may issue a fine for late payment.
The rules regarding stamp duty are very complex, there are many relief and exemptions available meaning that an answer is not always straight forward, please always seek expert advice on the stamp duty payable on any matter.
If you would like to discuss the above or have any queries, please contact our Property Department who would be happy to help.