CHANCELLOR Kwasi Kwarteng has cut stamp duty in a bid to help homebuyers save thousands of pounds.
The cut came into effect on the day the mini budget was announced (September 23, 2022).
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It will take 200,000 people out of paying Stamp Duty altogether.
Stamp duty land tax (SDLT) is a lump sum payment you have to make when purchasing property over a certain threshold.
It applies in England and Northern Ireland, with separate property tax schemes running in Scotland and Wales.
The “nil rate” stamp duty band has been doubled from £125,000 to £250,000.
This means a typical family moving into a semi-detached property will save £2,500 on stamp duty, the government said.
First-time buyers, who already paid no stamp duty on the first £300,000 of the price of a property, will see the threshold raised to £425,000.
The value of the property on which first-time buyers can claim relief has also been increased, from £500,000 to £625,000.
Exactly how much stamp duty you pay will also depend on the value of the property you’re buying, as well as whether it is your first or second home.
Here we show you how to calculate your potential savings.
How much could I save on stamp duty?
How much you will save from the cut to stamp duty depends on how much the house costs – but it could be thousands of pounds.
Here’s how much first-time buyers will save:
- £100,000 – no saving
- £200,000 – no saving
- £300,000 – no saving
- £400,000 – £5,000
- £500,000 – £6,250
First time buyers already paid no stamp duty on the first £300,000 of the price of a property.
This means looking at a property at this price or below will see no change.
But those looking to buy a property at £400,000 will now pay no stamp duty and will save £5,000.
First time buyers looking to purchase a home at £500,000 will now save £6,250.
Here’s how much homeowners looking to buy a new property will save:
- £100,000 – no saving
- £200,000 – £3,750
- £300,000 – £6,250
- £400,000 – £6,250
- £500,000 – £6,250
Homeowners looking to buy a new home are also set to benefit.
The government doubled the stamp duty threshold to £250,000 for all home purchases.
This means, someone looking to buy a property at this price will now pay no stamp duty, saving £3,750.
Someone looking to buy a property priced between £300,000 and £500,000 will save £6,250.
How do I calculate how much I will save?
To calculate how much you could save, you need to compare how much stamp duty you would have paid under the old system compared to now.
The easiest way to do this is to use a calculator.
You can use the Money Advice Service tool to show how much you would normally pay, while this Gov.uk calculator has been updated to calculate the cost from September 23, 2022.
The difference between the two is your saving.
Meanwhile, we spoke to a first time buyer who managed to save £150,000 towards her first home by yellow sticker shopping.
Here, we look at the government’s Help To Buy scheme, and if it is still open to applications.
