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Clarke & Son News Updates

Reduction in Stamp Duty Land Tax

Land Tax

As you will have no doubt seen the government announced this morning a reduction in Stamp Duty Land Tax (SDLT) rates effective immediately.

The main effect for house buyers is that the nil rate SDLT band has been increased from £125,000 to £250,000. This means that on purchases at or below £250,000 the buyer will pay no stamp duty whatsoever. The rates of Duty above £250,000 remain exactly as they were before and therefore from £250,000 to £925,000 duty will be charged at 5%. This equates to a saving of £2,500 on any residential property purchase over the amount of £250,000.

The other main change announced to SDLT this morning relates to first time buyers . The tax-free amount for a first-time buyer who has never owned residential property before has been increased from £300,000 to £425,000. This means that property at or below £425,000 will not have any SDLT charged for a first time buyer. There is a maximum property price to qualify for the first time buyer relief and this was increased from £500,000 to £625,000.

If you are purchasing a property at the moment and have not yet completed then you will benefit from the reductions in SDLT even if you have already exchanged contracts as it is charged on the day of completion. If you completed your purchase prior to today ( the 23rd of September) then the rates are not retrospective and there is nothing you can do do. If you have any queries about your purchase please contact us on 01256 320555.

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