Homebuyers receive Stamp Duty boost – here’s what you need to know04/01/2023
The threshold at which homeowners must begin paying stamp duty and land tax (SDLT) increased from £125,000 to £250,000 as of September 2022.
There is no stamp duty for first-time buyers in England and Northern Ireland on houses up to £425,000; the previous cap was £300,000.
Additionally, the maximum home value for which first-time purchasers are eligible to receive assistance increased from £500,000 to £625,000.
The following are the new SDLT rates for buying residential property:
- Up to £250,000 0%
- £250,000 – £925,000 5%
- £925,000 – £1,500,000 10%
- Above £1,500,000 12%
When there are surcharges
An additional 3% tax is applied to people who are buying additional properties.
Regardless of whether it’s a holiday home or a buy-to-let, the surcharge must be paid by anyone purchasing a second (or third, or fourth, etc.) residential property for £40,000 or more.
The 3% surcharge will be applied to each of the SDLT bands, making the actual rates SDLT payable on additional properties:
- Up to £250,000 3%
- £250,000 – £925,000 8%
- £925,000 – £1,500,000 13%
- Above £1,500,000 15%
Landlords considering purchasing multiple properties should seek advice before entering into a purchase agreement to ensure that they fully understand the implications of “linked transactions”.
The new Stamp Duty regulations are in effect until April 2025. However, the rules are different for Scotland and Wales, where SDLT is a devolved issue.
While home prices are still rising, the increase pace is sluggish
Despite growing inflation and the cost-of-living issue, house prices are still increasing, according to fresh statistics from the Office for National Statistics (ONS).
The average property price in October 2022 was £296,000, but some estate agents are advising home sellers to lower their pricing expectations as buyer demand begins to decline.
£20,000 more than the previous year
According to the most recent house price data for October 2022 released by HM Land Registry (HMLR), average prices climbed across the UK by 12.6% in the year to October 2022, up from 9.9% in September 2022.
According to the poll, the increase is still a £33,000 improvement over the same period in the previous year.
House prices increased by 6.7% in London during the past year, which is considerably less than the national average.
Over the past year, the average price of a home grew in England to £316,000 (13.2%), Wales to £224,000 (11.8%), Scotland to £195,000 (8.5%), and Northern Ireland to £176,000 (10.64%).
If you’re considering a property purchase, it is important to ensure you are making the best use possible of any applicable allowances. Contact JW Hinks on 0121 456 0190 and our friendly and professional team will provide you with continually updated guidance over the best course of action available.