Stamp Duty Land Tax – Update Sept 2022

As of September 23rd 2022 the then Chancellor, Kwasi Kwarteng has announced new rates to be applied to Stamp Duty Land Tax (SDLT). Although most measures announced in Mr Kwarteng’s budget have been reversed, the new Chancellor Jeremy Hunt has confirmed the changes to SDLT will remain. But what does it mean for first-time buyers and existing homeowners?

Here at enact conveyancing, we’ll take you through the latest update in more detail.

Why has the rate of SDLT changed?

With inflation at an all-time high, the government announced its ‘growth plan’ in a series of tax cuts including SDLT – citing a boost to the property market will help fuel the wider economy’s growth.

Unlike the previous ‘stamp duty holiday’ of 2020, the updated rates are a permanent change to the amount people will pay in tax on a property once they pass a certain threshold.

Industry experts anticipate that while the updated tax threshold will of course stimulate house market activity, it is unlikely that it will cause a stampede of buyers as with the previous SDLT holiday because the change is permanent.

The government claims: “Doubling the nil-rate band will enable up to 29,000 more people to move home each year, in turn boosting household consumption, which will increase confidence in the economy and support the hundreds of thousands of jobs and businesses which rely on the property market. This includes, for example, estate agents, cleaners, builders, contractors, removals companies, plumbers, decorators and others.”

SDLT rates on a single property

For existing homeowners that are selling their property and moving to a new home, the below table explains the new threshold at which you will pay SDLT.

You usually pay 3% on top of these rates if you own another residential property which we’ll cover further down in this article.

Property or lease premium or transfer value SDLT rate
Up to £250,000 Zero
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%


In October 2022 you buy a house for £295,000. The SDLT you owe will be calculated as follows:
• 0% on the first £250,000 = £0
• 5% on the final £45,000 = £2,250
• total SDLT = £2,250
Use the SDLT calculator to work out how much tax you’ll pay.


First-time buyer SDLT rates

For first-time buyers the discounted (relief) rate for those eligible has increased as follows:

• no SDLT up to £425,000
• 5% SDLT on the portion from £425,001 to £625,000

The government’s criteria of eligibility mean if you and anyone else you’re buying with are first-time buyers you will be able to benefit from the discounted rates.

However, if the price of the property you’re looking to purchase is over £625,000, you cannot claim the relief. In this instance, you will follow the rules for people who’ve bought a home before.

You are a first-time buyer and purchase a property for £500,000. The SDLT you owe will be calculated as:
• 0% on the first £425,000 = £0
• 5% on the remaining £75,000 = £3,750
• total SDLT = £3,750


Average asking prices for first-time buyer homes in Great Britain

According to Rightmove – below are the average asking prices for first-time buyer homes by region in England.

Region Average asking price (Aug 22) Monthly % price increase or decrease Year-on-year % increase
North East £129,903 2.6% 12.3%
North West £165,929 -0.5% 8.8%
Yorkshire and The Humber £166,801 -0.4% 8.1%
West Midlands £188,295 -0.5% 9.5%
East Midlands £191,685 0.7% 10.6%
South West £255,718 -1.1% 10.8%
East of England £276,543 -0.8% 8.2%
South East £296,817 -0.3% 7%
London £501,384 -1.6% 3.9%

It suggests that while the average house prices for UK properties continue to increase most first-time buyers should feel the benefit from the increase in tax relief – even those looking to buy in London as the discounted stamp duty rate of 5% for first-time buyers will now apply to properties costing up to £625,000 – up from £500,000.

Rates for buying additional property

If you’re an existing homeowner and you’re looking at buying an additional property, without selling your current home, you should expect to pay an increased rate of SDLT. This is currently set at 3% on top of the normal SDLT rates.

Use the SDLT calculator or check the higher rates to work out how much tax you’ll pay.

If you’re replacing your main residence

To be clear – you will not pay the extra 3% SDLT if the property you’re buying is replacing your main residence and that has already been sold.

However, If you have NOT sold your main residence on the day you complete your new purchase you’ll have to pay higher rates. This is because you own 2 properties.

You can apply for a refund if you sell your previous main home within 36 months.
There are special rules if you own property with someone else or already own a property outside England, Wales and Northern Ireland. Read the special rules for purchases that mean you own more than one property.

If it takes longer than 36 months to sell your previous main home

You may still be able to get a refund of the extra 3% SDLT if all of the following apply:
• you purchased your new home on or after 1 January 2017
• exceptional circumstances stopped you from selling your old home, for example, government restrictions because of coronavirus (COVID-19) or a public authority blocking the sale
• you have now sold your old home

What additional support is there for first-time buyers?

While the threshold increase on stamp duty tax is a helping hand to get first-time buyers onto the property ladder the increase in house prices and interest rates that directly impacts mortgages are still a big barrier to homeownership. Therefore, there are several other schemes under the government’s ‘own your home’ umbrella that can also help, including:

  • Lifetime ISA (LISA)
    • While the other government schemes help towards the immediate purchase of a property the LISA scheme is a long-term savings product intended to support younger people in saving for their first home, or for later life. Applicants can save up to £4,000 each year, while the government will contribute a further 25% of each new payment.
  • ‘First Homes’ scheme
    • If you’re a first-time buyer – under the ‘first homes scheme’ you could buy a property for 30% – 50% less than the market value. Only available in England the property can either be a new build from a developer or a home you buy from someone else who originally bought it as part of the scheme
  • 95% Mortgage Guarantee
    • After COVID-19 many 5% deposit mortgages were pulled off the shelves as the housing market reacted to the pandemic. To help stimulate the market and support those with smaller deposits the government introduced the 95% mortgage guarantee scheme. Unlike other schemes, it is available to first-time buyers as well as existing owners looking to move
  • Help to Buy: Equity Loan
    • The government has launched several phases of Help To Buy – the current being its Equity Loan scheme. Exclusively open to first-time buyers it’s beginning to wind down as the deadline for which buyers can reserve homes and apply for the Help to Buy: Equity Loan is set to end at 6 pm on 31 October 2022, with the actual scheme ending on the 31st of March 2023.
  • Shared Ownership
    • You can buy a home through the shared ownership scheme if you cannot afford all the deposit and mortgage payments for a home that meets your needs. Under the scheme, you buy a share of the property (between 10% and 75% of the home’s full market value) and pay rent to a landlord on the rest. More details on the scheme can be found on the government’s website.
  • Help to Build
    • Help to Build is the most recent of all the government schemes – launched in June 2022 and is expected to run for four years and is available to people in England that want to custom-build or self-build their own home. Applicants will receive an equity loan based on the estimated costs to buy a plot of land and build the home. The equity loan amount can be between 5% to 20% (up to 40% in London) of the total estimated cost. More details on the scheme can be found on the government’s website.

The Deposit Unlock Scheme:

The Help To Buy: Equity Loan scheme is widely popular among first-time buyers with many using it to get into the property ladder. However, the deadline for which buyers can reserve homes and apply for the Help to Buy: Equity Loan is set to end as mentioned above.

As the current initiative draws to a close there is an alternative non-government scheme buyers could consider in its absence – Deposit Unlock.

Unlike Help To Buy the Deposit Unlock scheme is available to both first-time buyers and home movers looking to buy a new build property with just a 5% deposit. To be eligible for Deposit Unlock you need to:

• Be a first-time buyer or moving home
• Have at least a 5% deposit
• Buy an eligible new-build home, not a pre-owned property
• Buy the property from a builder using Deposit Unlock

The participating home builders are:
Barratt Homes
Barratt London
• Bellway
• Bewley
• Bloor Homes
• Countryside Properties
• Crest Nicholson
• Croudace
• Davidson Group
David Wilson Homes
• Devine Homes
• Edenstone Holdings
• Fairview
• Hill
• Keepmoat
• Miller Homes
• Morris Homes
• Pat Munro
• Persimmon
• Redrow
• Taylor Wimpey
• Thakeham
• Vistry
• Wheeldon

In contrast to the Help To Buy scheme – house buyers don’t have to worry about the additional affordability stress tests when taking out a Deposit Unlock mortgage, which first-time buyers have to factor into their Help to Buy loan after the first five years.

Yet, while first-time buyers have had the choice of several Help To Buy mortgages – only three mortgage lenders make up the Deposit Unlock scheme:
• Accord Mortgages
• Nationwide Building Society
• Newcastle Building Society

Therefore – while applicants can still take advantage of Help To Buy, the interest in Deposit Unlock has yet to take off. Although once the Help To Buy scheme winds down it is expected that the Deposit Unlock scheme will become a natural bridge in the market for a low deposit scheme helping not just first-time buyers but also existing homeowners.

If you’re looking to move home and you are looking for a professional licensed conveyancer to manage your property move – get a free instant conveyancing quote from Enact conveyancing today.

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