Property buyers will be hit by a surprise hike in Stamp Duty Land Tax (SDLT) surcharge when purchasing a second property. In the newly announced 2024 budget, the UK will experience a rise of 2%, from the existing surcharge of 3%, to 5% in stamp duty tax when buying additional property.
The announced increase will raise more than £1.2bn in tax up to 2029-30.
The Treasury said the move would give first-time buyers and those looking to move house an advantage over second-home buyers and landlords, resulting in 130,000 additional transactions by these groups over the next five years.
The new stamp duty is set to affect purchases of second homes, buy-to-let residential properties, and companies purchasing residential property in the UK.
What is Stamp Duty?
Stamp duty is a tax paid when buying property over a certain price in England and Northern Ireland.
You pay the tax when you:
– buy a freehold property.
– buy a new or existing leasehold.
– buy a property through a shared ownership scheme.
– take on a mortgage or buy a share in a house.
The amount of stamp duty you owe depends on the cost of the property, whether it will be used for residential purposes, and whether you own any other property.
Now, buyers of homes worth less than £250,000 don’t pay stamp duty.
Changes to the Stamp Duty
If you already own a residential property worth £40,000 or more, and you buy another (or a part of one), you must pay an additional 3% on top of the rates above, external. This will rise to 5% from 31 October.
How Much is Stamp Duty?
The current rates of stamp duty are:
£0-£250,000 (£425,000 for first-time buyers) = 0%
£250,00-£925,000 = 5%
£925,001-£1.5m = 10%
£1.5m+ = 12%
From October 31st, people buying a second home will pay an extra 5% on top of this.
If you have any questions on the Stamp Duty, please do not hesitate to contact us on the details below,
You can email Howells to make an appointment at [email protected] or call us:
Sheffield: 0114 249 66 66
Barnsley: 0122 680 51 90
Rotherham: 0170 936 40 00
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