Published: September 27, 2022

Mini-budget stamp duty cut: what you need to know

Written by Amber Furr
Stamp Duty UK

Up 11% annually, the average UK house price reached a record high of £294,260 in August 2022.

While the UK property market remains as resilient and rewarding as ever, rising house prices are making it harder for first-time buyers to enter the housing market.

The September mini-budget

In an attempt to make buying property easier for UK residents, unveiled as part of the UK government’s ‘mini budget’, Chancellor Kwasi Kwarteng announced cuts to Stamp Duty Land Tax (SDLT) on 23rd September, coming into effect straight away.

The Chancellor said: “Home ownership 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. In the current system, there is no stamp duty to pay on the first £125,000 of a property’s value. We are doubling that – to £250,000.”

What is stamp duty?

Stamp duty is a property tax you pay when purchasing a property or land over a certain threshold in England and Northern Ireland.

You have 14 days to pay stamp duty from the date of completion.

The new stamp duty rates

(If the individual is moving homes, not purchasing an additional property)

0%: £0 – £250,000 (£425,000 for first-time buyers)

5%: £250,000 – £925,000

10%: £925,000 – £1,500,000

12%: £1,500,000+

As shown above, the threshold at which tax must be paid has doubled to £250,000 from its previous £125,000 level. This means that no stamp duty tax will be paid on the first £250,000 of a property purchase, unless you’re purchasing a secondary property, such as a buy-to-let investment.

Meanwhile the threshold for first-time buyers has been increased from £300,000 to £425,000.

As a result of the stamp duty cuts, the UK government estimate that 200,000 more people can forget stamp duty altogether.

How much stamp duty will I have to pay if the property is not an additional home?

As a UK resident, if you bought a property for the average price of a house in England – £312,000 – under the new rates you’d pay a total of £3,100 in stamp duty for this property – down from £5,600 under the previous rate.

If you bought in our latest Birmingham development under these circumstances, Affinity Living Lancaster Wharf, you wouldn’t have to pay stamp duty at all, as the starting price (£232,000) is below the increased threshold.

Please note that a surcharge applies if you are buying a secondary property (for investment purposes) or if you are not a UK resident.

How much stamp duty will I have to pay on the buy-to-let property?

How much stamp duty you’ll pay on buy-to-let property depends on your personal circumstances.

If you’re buying a buy-to-let property as a first-time buyer (this is unusual as most investors have already purchased property), then the standard stamp duty rates above apply.

If you already own property elsewhere and you’re purchasing a buy-to-let investment or an additional home, you will pay a 3% SDLT surcharge.

In this case you’ll pay the following stamp duty rates:

3%: £0 – £250,000

8%: £250,000 – £925,000

13%: £925,000 – £1.5m

15%: £1.5m+

For example, under these circumstances if you bought a £232,000 property in our latest Birmingham development, Affinity Living Lancaster Wharf, you’d pay £6,960 stamp duty – this is £5,500 less than you’d be paying on the cost of the average house price.

Please note – the amount of stamp duty payable is different for overseas investors. 

To find out more on the tax you have to pay, visit the UK government’s latest guidance for calculating your stamp duty land tax.

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