First-time buyers SDLT changes from Kwasi Kwarteng in the 2022 mini-budget Growth Plan There have been several changes to UK Stamp Duty. These changes came about because of the Growth Plan and Kwasi Kwarteng on 23rd September 2022. One of the changes to tax made by Kwasi Kwarteng was Stamp Duty. These changes were announced in the mini-budget. Kwasi Kwarteng’s idea is to stimulate the housing market and the economy at large. Stamp Duty was changed from 23rd September 2022 and was effective as of that date. First-time buyers also benefitted from Kwasi Kwarteng mini budget announcement. First-time buyers Stamp Duty also increased. 0% Stamp Duty rate for first-time buyers increased from £300,000 to £425,000 Use our Stamp Duty tax calculator to check how much you need to pay. Stamp duty relief for first time buyers Every home buyer must pay Stamp Duty Land Tax (SDLT) when purchasing UK house. First-time home buyers pay SDLT within 14 days to HMRC. It is also worth reviewing mortgage options in the UK for first time home buyers. What are the basics of Stamp duty for first-time buyers? If you buy any property or land in the UK, you must pay SDLT. You may qualify for first-time buyer Stamp Duty relief. If buying a property is below the threshold of £250,000, you avoid paying SDLT. If the house purchase price exceeds that, rate bands determine how much you pay. This 0% rate was changed from £125,000 to £250,000 by Kwasi Kwarteng’s mini-budget announcement on Friday, 23rd September, as part of the 2022 Growth Plan. The more expensive the house, the higher the Stamp Duty (SDLT) will be. This is costly for first-time buyers, hence the relief from HMRC. SDLT is calculated depending on how much house purchase price sits within each band, rather than the rate attached to the highest band you fall into being applied to the whole purchase price. SDLT is paid whether or not a property is purchased with a mortgage or as a cash purchase. Stamp Duty first-time buyers’ relief rates are available in the UK, irrespective of the mortgage. What are the UK SDLT rates? Most first-time buyers in England and Northern Ireland are exempt from paying Stamp Duty. There are no SDLT concessions for first-time buyers in Scotland or Wales, with or without a mortgage. To qualify as a first-time buyer in the UK, you cannot have bought or inherited property before. If the house is under £300,000, no SDLT will be due. If the house price is between £425,001 and £500,000, you will only pay a 5% Stamp Duty on that portion of the house price. This 0% rate was changed from £300,000 to £425,000 by Kwasi Kwarteng’s mini-budget announcement on Friday, 23rd September, as part of the 2022 Growth Plan. This is known as SDLT relief for first-time buyers. The First-time buyer’s relief from Stamp Duty is removed if the property purchased is above £625,000. This was £500,000 before Kwasi Kwarteng’s mini-budget announcement. First-time buyer SDLT relief only applies in the UK if you are purchasing a property that will be your primary residence. Landlords using a buy-to-let mortgage must pay normal SDLT rates. Married couples buying a home must be first-time buyers to claim the Stamp Duty relief. Unmarried couples buying a home jointly can get reduced rates only if one is a first-time buyer. Since October 2018, purchasing shared ownership property can also claim relief as first time buyers. Even if you have no SDLT to pay, a Stamp Duty return must still be completed under HMRC requirements. This applies whether or not the UK house has been purchased with a mortgage or as a cash purchase. Read the HMRC guidelines on this relief for first-time buyers in the UK. How do I qualify for the first time buyers relief? To qualify as a first-time buyer in the UK, you must buy a home as your main home. It must be the first home you have owned either in the UK or anywhere else in the world. If you’ve been gifted a house, you cannot claim any relief. Buy-to-let investments are also not included for this relief. When purchasing a home jointly, if either of you previously owned a house with a partner or spouse, SDLT relief is unavailable. This applies regardless of whether you were a joint tenant or a tenant in common at the property. We recommend that you read these ways to reduce SDLT as a property developer in the UK. When do you have to pay SDLT? Buying a UK house priced over £425,000 will trigger a Stamp Duty bill for the buyers. If you are a first-time buyer of a home in one of the more expensive regions of the UK, you may still pay SDLT, although less than a regular homeowner. If, for example, you purchased a house in London for £450,000, your Stamp Duty would be small compared to the tax charge without the relief. The SDLT relief increases the 0% rate from £250,000 to £425,000 for first-time buyers. To get the best possible interest rates, it is also essential to shop around on mortgages. What types of mortgage qualify for first-time buyer SDLT relief? Understanding the different types of mortgages available for first-time homes in the UK may affect your eligibility for relief. A Guarantor Mortgage means it is possible to claim the relief provided that the guarantor isn’t named on the deeds of a house. This is useful for first-time home buyers that struggle to get a mortgage. A Shared Ownership Mortgage means that regardless of whether you choose to pay SDLT on the entire home value or only the share you are buying initially, relief is available as long as the total property value is less than £500,000. While Stamp Duty relief cannot be claimed if you subsequently buy more shares in the house, SDLT will only become payable if your stake rises above 80%. A Gifted Deposit Mortgage means that if you receive a gifted deposit and your giftee won’t appear on the title deeds, you will be eligible to claim relief. A Help to Buy Mortgage gives a first-time buyer the use of relief. Stamp Duty First Time Buyer's Relief Tax Calculator Please note that the online tax stamp duty for first-time buyers’ calculators may not look right on a mobile device. You are recommended to view the tax calculators on a desktop/laptop. Please feel free to use our free online Stamp Duty First Time Buyer’s Relief Tax Calculator. Please note that the first-time buyer’s relief is not available when the property value exceeds £625,000. If the property you are buying is above this amount, please use the standard residential property Stamp Duty Land Tax calculator.