Mini-budget 2022: Stamp duty thresholds raised and relief for first-time buyers hiked in England and Northern Ireland
Homebuyers in England and Northern Ireland, including those purchasing a property for the first time, will pay £1,000s less in stamp duty after the Government announced it is increasing the thresholds at which the tax begins to be charged.
Update: 10 October 2022: As of today, people buying a home in Wales will not pay any Land Transaction Tax on the first £225,000 under new rules introduced by the Welsh Government. The threshold was increased from £180,000.
There are no tax reductions on second home purchases.
The change comes as part of today's mini-budget, with other key announcements, which we round up here, including a reversal of the 1.25 percentage point rise in national insurance and changes to universal credit.
On Friday, chancellor Kwasi Kwarteng announced that stamp duty will no longer be charged on the first £250,000 of a property's price. This is a doubling of the previous threshold, where no stamp duty was due on the first £125,000 of a purchase.
The Government also revealed that additional stamp duty relief applicable to first-time buyers' would also increase. This means that first-time buyers won't have to pay any stamp duty on the first £425,000 of a property's price, provided that the property costs less than £625,000.
Previously, the additional first-time buyers' relief only applied if the property cost less than £500,000.
These changes, which apply in England and Northern Ireland, are effective immediately.
See our Stamp duty guide if you're buying a property and want to work out exactly how much stamp duty you'll need to pay.
Watch: Martin Lewis' take on the stamp duty announcements
I am purchasing my next home – how will the stamp duty changes affect me?
If you're buying your next main home (in other words, you're moving up the property ladder), and you live in England or Northern Ireland, these changes mean that in the majority of cases you'll end up paying less stamp duty.
As of today, there is no stamp duty due on the first £250,000 of a property's price. Between £250,000.01 and £925,000, stamp duty is charged at a rate of 5%.
- On a £300,000 property. Here you would be charged no stamp duty on the first £250,000, and 5% on the remaining £50,000. This means you'd pay £2,500 in stamp duty.
- On a £500,000 property. Here you would be charged no stamp duty on the first £250,000, and 5% on the remaining £250,000. This means you'd pay £12,500 in stamp duty.
Do note that if you are buying an additional property, then a different rate of stamp duty applies. Please see our Stamp Duty guide for more information.
I am a first-time buyer – how will the stamp duty changes affect me?
If you are a first-time buyer, and you live in England or Northern Ireland, these changes mean that in the majority of cases you'll end up paying less stamp duty.
As of today, for first-time buyers there is no stamp duty due on the first £425,000 of a property's price. Between £425,000.01 and £925,000, stamp duty is charged at a rate of 5%. However, this first-time buyers relief only applies if the property you're buying costs less than £625,000 – if it costs more, you'll be charged the normal rate of stamp duty.
- On a £300,000 property. Here you wouldn't be charged stamp duty at all, as stamp duty for first-time buyers only kicks in above £425,000.
- On a £500,000 property. Here you would be charged no stamp duty on the first £425,000, and 5% on the remaining £75,000. This means you'd pay £3,750 in stamp duty.
- On a £750,000 property. As the property is above £625,000 in value, first time buyers' stamp duty relief does not apply. So, in this scenario, you wouldn't be charged stamp duty on the first £250,000, and 5% on the remaining £500,000. This means you'd pay £25,000 in stamp duty.
At what point do I have to pay stamp duty?
Stamp duty becomes payable once you 'complete' on your property. Completion is the point at which you receive the keys to the property and legally become the owner.
In England and Northern Ireland, you'll need to pay HM Revenue & Customs (HMRC) any stamp duty you owe within 14 days of completion.
Full details of how to go about how to go about paying HMRC your stamp duty can be found in our Stamp duty guide.