CHANCELLOR Kwasi Kwarteng announced plans to cut stamp duty in a bid to help homebuyers save thousands of pounds in his 2022 mini-budget.
It’s hoped that cutting stamp duty will aid growth by allowing more people to move property and get more first-time buyers on the housing ladder.
Kwasi Kwarteng announced a significant cut to stamp duty in the September 2022 mini budget[/caption]
But how will the cut impact buy-to-let properties?
Will the stamp duty cut affect buy-to-let properties?
The rise in stamp duty thresholds will apply to buy-to-let properties too.
But an existing additional tax on second home purchases – of which many are buy-to-lets – will also stay in place.
Read More on Tax cuts
How does stamp duty work on buy-to-let properties?
If you’re buying an additional property, such as a buy-to-let, landlords will have to pay an extra 3% in stamp duty on top of the rates for each band.
So on a buy-to-let up to £250,000 landlords will pay 3%.
On a property worth between £250,000 to £925,000 stamp duty will be 8%, while on a property valued between £925,001 and £1.5million landlords will pay 13%.
If the property is worth more than £1.5million stamp duty will be 15%.
How the stamp duty cut will work
Kwarteng explained that the changes to stamp duty are “effective from today”.
Under the old system, there was no stamp duty paid on the first £125,000 of a property.
Kwarteng will be doubling this, so there will be no stamp duty to be paid on the first £250,000 of a property.
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Under the old system, first-time buyers did not have stamp duty on the first £300,000 of a property and the new system will see this increase to £425,000.
Kwarteng will also be increasing the value of the property on which first-time buyers can claim relief, from £500,000 to £625,000.