Tembo's Guide To Stamp Duty in 2022
The rules around stamp duty have changed in 2022. Read our guide to learn more about stamp duty, and whether the changes could save you money.
What is stamp duty?
Stamp Duty Land Tax, or stamp duty for short, is a tax paid to the government when you buy property or land for more than £40,000 in England and Northern Ireland. Stamp duty is a huge money spinner for the government. We’re talking more than £8bn in tax receipts for 2020/21, which makes our love affair with homeownership highly profitable for HMRC. The tax is broken down into bands and each band triggers a different rate of tax. The more expensive the property’s price tag, the bigger the tax bill.
What's changed for first time buyers?
The government has increased the band at which first-time buyers will benefit from 0% stamp duty (the nil-rate band) - from £300,000 to £425,000. That means that an extra 66% of homes on the market are now exempt from stamp duty for first-time buyers.
There's a property price cap for first-time buyer relief, and that's rising too - from £500,000 to £625,000. This will benefit those looking to buy in London and the South East, where average first time buyer house prices are significantly higher than the rest of the country.
The average first-time buyer in London can expectto save a cool £11,250in stamp duty alone.
What's changed for movers?
The government has increased the band at which buyers will benefit from 0% stamp duty (the nil-rate band) - from £125,000 to £250,000.
So, if the property you're after is less than £250,000, you don't have to pay any stamp duty. According to Rightmove, a third of properties for sale in England are now exempt from stamp duty.
This means that if you're buying the average house in England (£312,000), you'll see a reduction in stamp duty from £5,600 to £3,100 - that's a cool £2,500 in savings.
I'm in the process of buying a property - what does this mean for me?
The tax break kicked in on Friday- so if you're in the process of buying your home, get in contact with your solicitor, to make sure you get the discount.
The tax break will be welcome news for both new buyers and movers. Having the spare grand or two could give you further flexibility when it comes to saving for a deposit, or keeping cash spare for renovations.
I'm thinking about buying - should I take the plunge?
If you've been thinking about buying a new place or purchasing your first home make a plan to see how much you could afford.