Changes to Stamp Duty Land Tax and First-time Buyers relief
The Chancellor has put forward the Growth Plan 2022 which contains changes to Income Tax, National Insurance Contributions and Stamp Duty Land Tax.
As a result, the Nil-band rate for Stamp Duty Land Tax rates payable on residential properties was increased on 23 September 2022. This means that in residential transactions, tax becomes payable from £250,000 rather than £125,000. This has been done with the aim of growing the property market – the government website has suggested that this change will enable up to 29,000 more people move into their homes each year.
The updated rates and bands can be seen below:-
|Transfer value||Old Stamp Duty Land Tax Rate||Stamp Duty Land Tax Rate from 23 September 2022|
|Up to £125,000||Nil||Nil|
|The next £125,000 (portion from £125,001 to £250,000)||2%||Nil|
|The next £675,000 (portion from £250,001 to £925,000)||5%||5%|
|The next £575,000 (portion from £925,001 to £1,500,000)||10%||10%|
|The remained (portion above £1,500,000)||12%||12%|
The Growth Plan has also introduced changes to help first-time buyers. As a first-time buyer, Stamp Duty Land Tax become payable from £425,000 rather than the initial band of £300,000. First-time buyers’ relief is also available on properties with a value of up to £625,000 rather than £500,000.
First-time buyers should also be looking into whether or not a Lifetime ISA is suitable for them. The savings ISA was introduced to support younger people saving for their first home, or for later life. Under this account, you may be eligible to receive a 25% government bonus of up to £4,000 on your saving each year until your 50th birthday.
Please contact our Real Estate team where one of our expect solicitors would be pleased to help you with your next purchase.