A mini budget announced on Friday (23rd September 2022) by Chancellor Kwasi Kwarteng has confirmed that Stamp Duty will be cut, along with a number of other measures to help tackle the cost-of-living crisis. Here’s what the cut, effective immediately, means for local homebuyers.
Stamp duty is a tax payable to the government when you buy a home, or land, priced above a certain threshold in England or Northern Ireland.
The government is reforming stamp duty by doubling the level at which people begin paying this from £125,000 to £250,000.
This means a third of all homes currently for sale (33%) are now completely exempt from stamp duty in England, compared to the 7% when the threshold was £125,000.
This government is also committed to helping first-time buyers get on the property ladder in two ways. Firstly, by increasing the level first-time buyers start paying stamp duty from £300,000 to £425,000.
In addition, the government is allowing first-time buyers to access the relief when they buy a property costing less than £625,000 rather than the current £500,000.
These measures will reduce stamp duty bills across the board for all movers by up to £2,500 with first-time buyers able to access up to £11,250 in relief.
In his statement, Kwarteng says: "Today's statement is about growth; home ownership is the most common route for people to own an asset, giving them a stake in the success of our economy and society,"
"So to support growth, increase confidence and help families aspiring to own their own home, I can announce that we are cutting stamp duty."
"The steps we have taken today mean that 200,000 more people will be taken out of paying stamp duty altogether."
The government says that growth is its top priority and by taking these measures will boost the property market, in turn helping businesses expand to help fuel the wider economy’s growth.
Rightmove’s property expert Tim Bannister says last week’s announcement is likely to stimulate more demand from homebuyers: “If the stamp duty cuts lead to a big jump in prospective buyers competing for the constrained number of properties for sale, then it could lead to some unseasonal price rises over the next few months. But because the change is permanent, and because of gathering headwinds such as rising mortgage rates, we expect to see a more gradual increase in demand compared with the surge when the temporary stamp duty holiday was announced in 2020.”
“With more buyer demand we would also expect that the current trend of more properties coming to market will continue, offering more choice for buyers.” he adds.
Ashtons' Sales Director Nick Wearmouth comments: "The recent stamp duty announcement will offer tangible benefits to purchasers, especially first-time buyers. The uncertain outlook with interest rates will temper the benefit to a degree but any additional support to encourage new buyers into the market is without doubt beneficial to create movement within the market locally."
This is a permanent measure and will apply only in England and Northern Ireland. Stamp duty is not charged in Scotland, instead home purchasers pay Land and Buildings Transaction Tax, with rates set by the Scottish government.
Make the most of the stamp duty cut. If you are considering buying or selling a home, or are a landlord considering opportunities for your portfolio, find out how much you could save by getting in touch with your local branch today. You can also access our online Stamp Duty calculator on our website.
