SDLT Threshold Increased to £250,000

Chancellors always like to pull rabbits out of the hat and make surprise announcements at the end of their Budget speech.

Although rumoured in the run up to this mini-budget, the SDLT announcement was still a surprise as house prices have been steadily rising. Increases in mortgage rates are likely to slow the market so the SDLT announcements are designed to stave off a housing slump. Moving house has a multiplier effect on the economy as people tend to spend money decorating and furnishing their new home, with estimates suggesting that doing so drives additional spending worth about 5% of the house value.

It is thus crucial to ensure medium-term confidence in the property market and maintain the growing momentum as the UK economy recovers. The Government has therefore cut SDLT for home buyers across England and Northern Ireland.

For residential property transactions completed on or after 23 September 2022;

·       The Nil Rate Band (NRB) has been increased from £125,000 to £250,000.

·       The NRB for first-time buyers has been increased from £300,000 to £425,000. This applies where first-time buyers purchase a property costing less than £625,000 (previously £500,000).

Different taxation rules apply to property transactions in Scotland and Wales and no changes have been announced in this regard.