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Mini-Budget: Chancellor raises stamp duty land tax thresholds


To reduce the burden of buying a home, the Chancellor has increased the thresholds at which stamp duty land tax applies for both first-time buyers and other purchasers.

23rd Sep 2022
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UK property prices rapidly increased in 2022, but talks of a recession and property market crash have been circulating. According to Forbes, the average UK house price fell by 1.3% in August 2022, the first drop this year. Stamp duty land tax (SDLT) receipts reached an eye-watering £8.9bn between April and August 2022 -- 29% higher than in 2021 when the SDLT holiday was in place.

The threat of rising interest rates has caused a buying frenzy as estate agents have reported a flood of properties as people try to move home before the next rate increase. Many are worried about the ability to pay their mortgages if interest rates rise, especially those on variable-interest mortgages.

To tackle the issues in the housing market it was forecasted a slash in residential SDLT rates would be announced.

New SDLT thresholds

From 23 September 2022, the threshold from which SDLT must be paid on the purchase of residential property doubled from £125,000 to £250,000. This means the 2% tax rate has been abolished, saving purchasers a potential £2,500. Although this is not a considerable saving, it’s a hint at the measures the government could take to keep the property market moving.

The new SDLT rates for residential properties are:

Property or lease premium or transfer value

SDLT rate

Up to £250,000


The next £675,000 (the portion from £250,001 to £925,000)


The next £575,000 (the portion from £925,001 to £1.5m)


The remaining amount (the portion above £1.5m)


First-time buyers

First-time buyers received the most beneficial savings in this mini-Budget, as the threshold at which properties are chargeable to SDLT when all of the buyers qualify as first-time was raised from £300,000 to £425,000. Also, the maximum value of the property which qualifies for first-time buyer relief is increased from £500,000 to £625,000.

The new rates and thresholds for first-time buyers are now:

Property price


On the first £425,000


On the remaining £200,000


This widens the property market for first-time buyers and enables those in cities with higher property prices to benefit from the relief.

No change for pension investments

There were whispers that defined contribution pension schemes may be able to invest in residential property. Unsurprisingly, this change has not been implemented as over the years the government has promoted home ownership by reducing available tax savings for landlords. Instead, these types of pension schemes can invest in the UK’s science and technology firms.

Investment zones

The government is considering introducing full relief from SDLT on commercial properties purchased for use or development within the newly announced investment zones. Land or buildings acquired within those zones to build or convert to new residential properties could also be free of SDLT.

More detail on these plans will be released by the Department for Levelling Up, Housing and Communities.  


The increase in SDLT thresholds is helpful but is only one part of a very complex problem of how to make home ownership less onerous in the coming years.  

Replies (2)

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By Hugo Fair
24th Sep 2022 00:34

Example 1 of why I'm not an economist ...

* Why is it thought a 'good thing' (other than by an individual house owner) for property prices to keep increasing (and at a far faster rate than inflation)?
Doesn't it distort all sorts of aspects of the national economy (from savings & pensions habits, to a general perception that risk is bad and that short-term gains trump planned investment growth)?

Example 2 ...

* Why is it thought that reducing SDLT (a truly unpopular but 'profitable' tax) will enable more people to join the housing market (given all the earlier evidence that it just leads to higher prices)?
Doesn't it depend on the (unstated) policy objectives - e.g. it may well assist 'mobility' (frequency of people buying/selling) but that really requires a much lower tax take; whereas it's unlikely to do anything noticeable for first-time buyers (who need supply to be tackled not taxation)?

Basically I'm sure this tinkering is of great interest to those making a business in some related area of construction/agency/lettings/etc ... but it does nothing for most people, who (although they may not all realise it) would be better off if property prices stagnated (or even slowly drifted down).

Thanks (1)
By SteveHa
24th Sep 2022 12:13

Can't really comment on this - waiting for the Senedd response, since that will have more relevance for me.

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