Stamp Duty Changes in 2023: What You Need to Know?

Table of Contents

• Introduction

  • What is stamp duty?

  • How does stamp duty work?

• Stamp Duty Changes in 2023

  • Nil rate band increased to £250,000

  • First-time buyers' stamp duty threshold increased to £425,000

  • Additional 3% surcharge for second homes and buy-to-let properties

  • Relief for properties that are sold within 3 years and made available for affordable housing

• Who is affected by the stamp duty changes?

• How to calculate your stamp duty liability

• Conclusion

Introduction

Stamp duty is a tax that is paid on the purchase of property in the UK. The amount of stamp duty that you pay depends on the value of the property.

In 2023, there are a number of changes to the stamp duty rules. These changes are designed to make it easier for first-time buyers to get on the property ladder and to discourage people from buying second homes or buy-to-let properties.

How does stamp duty work?

Stamp duty is calculated on the purchase price of the property. The amount of stamp duty that you pay depends on the value of the property and the type of property.

For residential properties, the stamp duty rates are as follows:

• Nil rate band: £0 to £250,000

• 2%: £250,001 to £925,000

• 5%: £925,001 to £1.5 million

• 10%: £1.5 million and above

For non-residential properties, the stamp duty rates are as follows:

• Nil rate band: £0 to £150,000

• 3%: £150,001 to £250,000

• 5%: £250,001 to £1 million

• 8%: £1 million and above

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Stamp Duty Changes in 2023

The following are the key changes to the stamp duty rules in 2023:

• The nil rate band for residential properties has been increased from £125,000 to £250,000. This means that you will not have to pay any stamp duty on the first £250,000 of the purchase price of your home.

• The first-time buyers' stamp duty threshold has been increased from £300,000 to £425,000. This means that first-time buyers will not have to pay any stamp duty on the first £425,000 of the purchase price of their home.

• There is now an additional 3% surcharge on the purchase price of second homes and buy-to-let properties. This means that you will pay an extra 3% stamp duty if you are buying a second home or a buy-to-let property.

• There is a new relief for properties that are sold within 3 years and made available for affordable housing. This relief means that you will not have to pay any stamp duty on the first £500,000 of the purchase price of the property if you sell it within 3 years and make it available for affordable housing.

Who is affected by the stamp duty changes?

The stamp duty changes in 2023 affect everyone who is buying a property in the UK. However, the changes are most likely to benefit first-time buyers and people who are buying a property to live in.

How to calculate your stamp duty liability

You can calculate your stamp duty liability using the HM Revenue and Customs (HMRC) stamp duty calculator. The calculator is available on the HMRC website.

Conclusion

The stamp duty changes in 2023 are designed to make it easier for first-time buyers to get on the property ladder and to discourage people from buying second homes or buy-to-let properties.

If you are thinking of buying a property in 2023, it is important to be aware of the changes to the stamp duty rules. You can use the HMRC stamp duty calculator to calculate your stamp duty liability.

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