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Understanding Stamp Duty: How Recent Changes Impact Homebuyers

Stamp Duty Land Tax (SDLT) is a key expense for UK property buyers. Recent changes have significantly influenced how much buyers need to budget.

What is Stamp Duty?
SDLT is a tax on property purchases in England and Northern Ireland, with rates increasing in tiers based on the property price. This system ensures higher-value properties incur more tax, while first-time buyers often benefit from reliefs.

-Key Changes
Stamp Duty Holiday (2020-2021)

To stimulate the market during COVID-19, the government temporarily raised the SDLT threshold to £500,000. This holiday ended in September 2021, returning the threshold to £125,000.

First-Time Buyer Relief:
First-time buyers pay no SDLT on properties up to £425,000 and enjoy reduced rates on homes up to £625,000, easing their entry into the market.

Additional Property Surcharge:
A 3% surcharge applies to additional properties, making buy-to-let and second homes more expensive.

Non-UK Resident Surcharge:
Since April 2021, non-UK residents face a 2% SDLT surcharge on property purchases.

Impact on Homebuyers

-First-Time Buyers benefit from significant tax savings.

-Home Movers must now account for SDLT in their budgets.

-Investors face higher costs due to the additional property surcharge.

-International Buyers must navigate the new 2% surcharge.

-Understanding these changes is crucial for anyone looking to buy property in the UK, ensuring you’re well-prepared for the costs involved.

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