Do first-time buyers pay stamp duty? | The Sun

October 26, 2022

STAMP duty can add thousands of pounds to the cost of your move but it's worth knowing that some don't have to pay it.

The former Chancellor Kwasi Kwarteng announced plans to cut stamp duty in September's mini-budget in a bid to boost economic growth.

And even though Jeremey Hunt tore up most of his predecessor's mini-Budget, the cut to stamp duty will stay in place.

This will mean that thousands of households will save up to £6,250.

It's important to know what the changes mean for you so below we explain all.

What is stamp duty?

Stamp duty land tax (SDLT) is a lump sum payment you have to make when purchasing property over a certain threshold.

You pay the tax when you:

buy a freehold property
buy a new or existing leasehold
buy a property through a shared ownership scheme
are transferred land or property in exchange for payment, for example you take on a mortgage or buy a share in a house

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The rate a buyer has to pay depends on the price, type of property and whether or not they already own a home.

Who has to pay it?

Since, September 23, first-time buyers have not had to pay any stamp duty on homes costing less than £425,000.

They only have to pay it on properties costing more than this.

This figure was previously £300,000 but was increased by Chancellor Kwasi Kwarteng.

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The maximum value of a property on which first-time buyer's relief can be claimed also increased from £500,000 to £625,000.

Under the previous system, no stamp duty was paid on the first £125,000 of all property purchases but the government has doubled that to £250,000.

Back in 2020 the Treasury temporarily raised the stamp duty threshold from £125,000 to £500,000 for sales of homes in England and Northern Ireland.

Have the rules changed?

HMRC is now considering potential changes to the SDLT rules for mixed-use property purchases.

This can mean residential and non-residential properties, for example, a country house with land used for grazing, or a large-scale building used for flats and retail.

Last September, the government stopped what was called the stamp duty holiday.

The aim was to give buyers a break and to buzz some energy back into the property market.