Our November 2022 summary of the latest developments in Property law and practice is as follows:

The Chancellor’s “mini-budget” of 23 September 2022 made immediate changes to rates of Stamp Duty Land Tax (SDLT) for residential property transactions in England and Northern Ireland. The appointment of Jeremy Hunt as new Chancellor saw several policies being reversed however, the government have confirmed that the changes announced in the mini-Budget on 23 September 2022 to the SDLT rates will remain. As such, for residential property transactions whose effective date was on or after Friday 23^rd September 2022, the rates of tax are now:

• 0% for chargeable consideration that does not exceed £250,000
• 5% for that part exceeding £250,000 but not exceeding £925,000
• 10% for that part exceeding £925,000 but not exceeding £1,500,000
• 12% for the remainder exceeding £1,500,000

In addition, the higher rates of tax applicable to higher rate transactions (for example the “additional homes” surcharge) have been adjusted accordingly so that a 3% rate now applies on a chargeable consideration that does not exceed £250,000, and the additional 3% surcharge is added to the above rates in the tax brackets mentioned above.

Many first-time buyers will also be relieved to know that the increase of level of consideration from £300,000 to £425,000, at which first-time buyers start paying SDLT, introduced in the “mini-budget” will also remain. For first-time buyers, whose effective date is on or after 23 September, no tax is payable if the consideration does not exceed £425,000 and will pay SDLT at the rate of 5% on so much of the chargeable consideration that exceeds £425,000 but does not exceed £625,000. To benefit from this relief, four conditions must be satisfied:

• The transaction consists of a major interest in a single dwelling
• The relevant consideration does not exceed £625,000 (increased from £500,000)
• The purchaser, or (if more than one) each purchaser, is a first-time buyer who intends to occupy the dwelling as the purchaser’s only or main residence
• The transaction is not linked to another land transaction

As before, if the dwelling is purchased jointly, all joint purchasers must meet the conditions for the relief to apply.

Following the announcement of changes to the rates of SDLT on residential property transactions in England and Northern Ireland, on 27 September 2022 the Welsh Government announced changes to the rates of tax for residential property transactions in Wales that occur on or after 10 October 2022. As such from 10 October 2022 the new rates of tax applicable in Wales are now:

• 0% for chargeable consideration that does not exceed £225,000
• 6% for that part exceeding £225,000 but not exceeding £400,000
• 5% for that part exceeding £400,000 but not exceeding £750,000
• 10% for that part exceeding £750,000 but not exceeding £1,500,000
• 12% for the remainder exceeding £1,500,000

The rates of tax on higher rates transactions (for example the 4% “additional homes” surcharge) and the bands within which the rates apply, have been left unchanged, as is the case with non-residential property rates and bands.

Please note this update is subject to change which will be announced by the Government in the weeks to come and is accurate as of 02 November 2022.