Thousands of buyers will benefit from the government’s permanent cut to stamp duty, which was announced today in Chancellor Kwasi Kwarteng’s ‘mini-Budget’.
Under new rules, which come into effect from 23 September 2022, the stamp duty exemption threshold has been raised from £125,000 to £250,000.
The first-time buyer exemption threshold has also been raised from £300,000 to £425,000, while the maximum property value on which first-time buyer relief can be claimed has risen from £500,000 to £625,000.
The Chancellor believes the cuts could mean as many as 200,000 more buyers will now pay no stamp duty at all.
He said: “Homeownership is the most common route for people to own an asset giving them a stake in the success of our economy and society, so to support growth, increase confidence and help families aspiring to own their own home I can announce that we are cutting stamp duty.
“The steps we’ve taken today mean that 200,000 people will be taken out of paying stamp duty all together. This is a permanent cut to stamp duty effective from today.”
What are the new stamp duty rates?
The stamp duty cut means the rates you’ll pay if you’re an existing or previous homeowner are:
Portion of purchase price |
Stamp duty rate |
£0 - £250,000 |
0% |
£250,001 - £925,000 |
5% |
£925,001 - £1.5m |
10% |
£1.5m + |
12% |
If you’re a first-time buyer, you’ll pay:
Portion of purchase price |
Stamp duty rate |
£0 - £425,000 |
0% |
£425,001 - £625,000 |
5% |
If you’re a first-time buyer purchasing a property for more than £625,000, you’ll pay the same rates of stamp duty as existing or previous homeowners.
If you’re buying a second home or a buy-to-let and you already own a property, you’ll pay an additional 3% on each stamp duty band:
Portion of purchase price |
Stamp duty rate |
£0 - £250,000 |
3% |
£250,001 - £925,000 |
8% |
£925,001 - £1.5m |
13% |
£1.5m + |
15% |
How much stamp duty will I pay?
The examples below illustrate how much you will typically pay.
Example #1
Stephanie is selling her current property and buying a new home worth £500,000.
She’s not a first-time buyer, nor does she own an additional property.
Stephanie’s stamp duty bill works out as follows:
Purchase price |
Current stamp duty bill |
New stamp duty bill |
£500,000 |
£15,000 |
£12,500 |
Stephanie’s saving is: £2,500
Example #2
Kate is an existing homeowner but is buying a property for £200,000 to rent out as a
buy-to-let. Kate is not a first-time buyer but will now own two properties, meaning she’ll pay the additional home rate of stamp duty as follows:
Purchase price |
Current stamp duty bill |
New stamp duty bill |
£200,000 |
£7,500 |
£6,000 |
Kate’s saving is: £1,500
Example #3
Andy and Jessica are both first-time buyers purchasing a house together for £500,000.
Because they’re buying for the first time, they qualify for additional stamp duty relief up to £425,000, meaning their bill works out at:
Purchase price |
Current stamp duty bill |
New stamp duty bill |
£500,000 |
£10,000 |
£3,750 |
Andy and Jessica’s saving is: £6,250
