Last month provided a significant boost for those looking to buy their first property, with the government’s mini-budget announcing that the threshold for paying stamp duty is being raised from £300,000 to £425,000 for first-time home buyers (the property must now cost less than £625,000 to be eligible for stamp duty relief, rising from the previous £500,000 threshold). This means that first-time buyers will now only start to pay the standard 5% stamp duty tax rate when the transaction is worth more than £425,000, and continue in line with the standard rate by paying 10% tax on the value in excess of £925,000, rising to 12% above £1.5 million.
The government’s announcement that the threshold for paying stamp duty is rising permanently from £125,000 to £250,000 was welcome news for all property buyers, including second-home owners. For purchasers of second homes and residential buy-to-let properties (as long as the buyer already owns their own home), the 3% stamp duty tax surcharge continues to apply, meaning they will have to pay the 3% rate on transactions worth up to £250,000, and 8% above £925,000, rising to 15% on property values above £1.5 million.
The amount of stamp duty due from buy-to-let property buyers can vary depending on their individual circumstances. For example, first-time buyers purchasing a buy-to-let property would still be exempt from stamp duty on property values up to £425,000, while UK non residents pay a 2% surcharge above the standard stamp duty rates. This is one example of the sometimes complex rules surrounding stamp duty which can make sound legal advice critically important for prospective property buyers.
Our firm regularly handles the conveyancing process on behalf of both first-time buyers and second-home and buy-to-let property buyers, which includes advising on stamp duty liabilities and making sure that they are minimised. You can find out more about the stamp duty rules for first-time and second-home buyers in the residential conveyancing section of our website: