On the 17th of November 2022, Chancellor Jeremy Hunt announced that there will be many rises in tax happening soon, apart from Stamp Duty Land Tax (SDLT). Mr Hunt also announced that the cuts to SDLT will remain but will be temporary and will only be there until the 31st of March 2025.
The government increased the nil-rate threshold of SDLT on the 23rd of September 2022 from £125,000 to £250,000 for anyone purchasing a residential property in England and Northern Ireland which came into effect instantly.
In addition – notable changes were implemented for first-time buyers – the nil rate threshold was increased from £300,000 to £425,000. There was also a significant change to the maximum purchase price that first-time buyers can claim First Time Buyers’ Relief for was increased to £625,000 from £500,000.
Over the tax year of 2021/2022, SDLT raised by £14.3 billion – £10.1 billion which was raised from residential property. The recently published policy shows that the costs from the SDLT cuts will be £745 million in 2022/2023 and will increase to £1,085 million in 2024/2025 which will increase further to £850 million in 2025/2026. However, it’s important to note that these costings are just estimates – they will be affected by ever-changing house prices and other factors, which will influence how many property transactions there will be.
There are likely to be more changes to SDLT in the future. In the autumn of 2021, the government published a consultation document that detailed potential changes to SDLT rules for Mixed-Dwellings Relief and mixed-use purchases. The consultation ended in February 2022, yet the government hasn’t given its consultation response.
The Office for Budget Responsibility (OBR) anticipates that the number of transactions in the housing market will slow over the next two years therefore, SDLT cuts published in the mini-budget will stay in effect until the 31st of March 2025.
To learn more about the autumn 2022 statement, email laura.catania@attwells.com for more information on stamp duty.
