How has Stamp Duty changed

7th October 2022

A new cut announced today could mean up to 200,000 more buyers pay no stamp duty at all, according to new Chancellor Kwasi Kwarteng.

The Chancellor confirmed the nil rate band for stamp duty – the amount at which the tax becomes payable – was rising to £250,000 from 23 September 2022.

The announcement means no stamp duty is due on the first £250,000 of a property’s purchase price. The previous exemption threshold was set at £125,000.

First-time buyers, meanwhile, will pay no stamp duty on the first £425,000 of a property’s purchase price up to a maximum value of £625,000. First-time buyer relief was previously set at £300,000 on properties costing up to £500,000.

Mr Kwarteng said: “Homeownership is the most common route for people to own an asset giving them a stake in the success of our economy and society, so to support growth, increase confidence and help families aspiring to own their own home I can announce that we are cutting stamp duty.

“The steps we’ve taken today mean that 200,000 people will be taken out of paying stamp duty all together. This is a permanent cut to stamp duty effective from today.”

The new rates of stamp duty from September 23

The Chancellor’s stamp duty cut is effective immediately, meaning if you’re either an existing homeowner or have owned a property in the past, you’ll pay:

First-time buyers, meanwhile, will pay the following rates of stamp duty:

If you’re a first-time buyer and the property you’re purchasing is costing more than £625,000, you’ll pay the same rates of stamp duty as existing or previous homeowners.

Stamp duty rates for those buying second homes or buy-to-let properties when they already own a property elsewhere will continue to have a 3% surcharge.

This means you’ll pay the following rates:

How much stamp duty will I pay?

The examples below illustrate how much you will typically pay.

Example #1

Stephanie is selling her current property and buying a new home worth £500,000.

She’s not a first-time buyer, nor does she own an additional property.

Stephanie’s stamp duty bill works out as follows:

Stephanie’s saving is: £2,500

Example #2

Kate is an existing homeowner but is buying a property for £200,000 to rent out as a
buy-to-let. Kate is not a first-time buyer but will now own two properties, meaning she’ll pay the additional home rate of stamp duty as follows:

Kate’s saving is: £1,500

Example #3

Andy and Jessica are both first-time buyers purchasing a house together for £500,000.

Because they’re buying for the first time, they qualify for additional stamp duty relief up to £425,000, meaning their bill works out at:

Andy and Jessica’s saving is: £6,250