House buyers will face increased stamp duty taxes starting from tomorrow after Rachel Reeves announced the tax hike in Labour’s Autumn Budget today.
But an increase in stamp duty rates will only affect second-home buyers, landlords buying-to-let properties or commercial business properties, the Chancellor has confirmed.
From Thursday, second home buyers face a stamp duty rise of two percentage points, up from 3 percent to 5 percent.
Stamp duty is taxed in value based bands. For a first home worth up to £125,000 the buyer will pay no tax and this has been slashed from £250,000 – which means more people will end up paying more Stamp Duty.
If the property is valued at £125,000 to £925,000, the buyer will pay no tax on the first £125,000, and now, five per cent tax on any remaining value.
This means that someone buying a house worth £700,000 would pay a £28,750 tax bill, or five percent of £575,000.
That means second home buyers will face a £12,500 stamp duty bill for a £250,000 property, a £5,000 increase from £7,500 before.
For a £125,000 property, the charge will go be £6,250, a £2,500 increase.
First time buyers won’t pay any stamp duty on a house priced lower than £425,000 although this is reducing back down to £300,000 from April in a change which had already been announced by the previous government.
On second homes, the bands are now five percent tax for over £125,000, eight percent for the next amount to £925,000, then 13 percent for £925,001 to £1,500,00 and 15 percent for any value above £1.5m.
“This will support over 130,000 additional transactions from people buying their first home, or moving home, over the next five years,” Chancellor Rachel Reeves pledged during her Budget.
