United Kingdom
October 2022
UK Rent Report

Permanent holiday for Stamp Duty

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Landlords adding properties to their portfolios in England and Northern Ireland will now have less tax to pay.

As part of Prime Minister Liz Truss’s mini-budget last month, the government pushed up the threshold at which homebuyers start paying Stamp Duty Land Tax with immediate effect – just 14 months after the end of the Stamp Duty holiday brought in during the COVID-19 pandemic.

Buyers will no longer have to pay any stamp duty on the first £250,000 of the cost of a home, up from £125,000 previously. First Time Buyers’ Relief is also being extended. FTBs will pay no stamp duty on the first £425,000 on any property selling for up to £625,000, after which they lose their tax relief. However, the 3% Stamp Duty surcharge on second homes is staying put.  

The Stamp Duty cut was one of very few of the mini-budget tax cuts to survive incoming Chancellor Jeremy Hunt’s emergency statement this week. The bottom rate of income tax will remain at 20%, corporation tax will rise to 25% and the Energy Price Guarantee will only last until April – but the government has confirmed that the tax cut for homebuyers will be left alone.

The Stamp Duty change only applies in England and Northern Ireland, but homebuyers in Wales also received a tax break this month. From 10 October, the threshold at which buyers start paying Land Transaction Tax rose from £180,000 to £225,000. However, LTT has been raised on home purchases worth more than £345,000, and buyers of these properties could pay up to £550 more in tax.

Is this the investment booster the industry needs?

While the tax cut will make it cheaper for landlords to buy properties, it isn’t likely to make much of a difference to their investment decisions. The maximum Stamp Duty saving on a home worth £250,000 or more comes to £2,500 – possibly not enough to cover the recent increase in mortgage rates. 

It also isn’t the tax cut the industry has been asking for. The 3% Stamp Duty surcharge on second homes is the tax that is more likely to put landlords off buying: a SpareRoom poll last month found that 66% of landlords and agents wanted it scrapped. Even more, 72%, wanted buy-to-let mortgage interest to qualify for tax relief, as it did until 2020. 

Other money headlines

HMRC fines estate agents more than £500,000 for AML breaches – Property Industry Eye

Truss confirms Corporation Tax U-turn – Letting Agent Today

What Jeremy Hunt’s statement means for you – BBC

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