The new Chancellor, Kwasi Kwarteng, has confirmed a permanent stamp duty cut in the mini-Budget announced this morning to the Houses of Parliament.
The first cut comes by doubling the level at which people begin paying stamp duty land tax from £125,000 to £250,000.
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.
This means in monetary terms that stamp duty bills could be reduced across the board for all movers by up to £2,500, with first-time buyers able to access up to £11,250 in relief.
These tax cuts took effect from midnight today (Friday 23 Sept 2022).
In line with other proposals announced today, this new government is prioritising growth. It believes by taking these measures the UK Property Market will be boosted, which in turn will help businesses expand to help fuel the wider economy’s growth.
“The government is committed to fiscal sustainability by ensuring the economy grows faster than our debts and keeping debt as a proportion of our economy on a downward path.” said Kwasi Kwarteng
Table of potential savings
|SDLT charge for standard home mover (£)||SDLT charge for standard home mover (£)||SDLT charge for first time buyer (£)||SDLT charge for first time buyer (£)|
|Price (£)||As at 22 Sep 2022||As at 23 Sep 2022||Saving (£)||As at 22 Sep 2022||As at 23 Sep 2022||Saving (£)|
For many first-time buyers the large expenses which come with buying a new home can be off-putting but by increasing the threshold by which they would pay Stamp Duty, this would reduce the amount required to save and stimulate interest and purchases. They will now not pay it if their first home costs less than £425,000, an increase of £125,000 on the current threshold.
In addition, if a first-time buyer does spend more than £425,000, they will now be entitled to relief – meaning they will pay 5% SDLT – up to £625,000, an increase of £125,000 from the current limit.
“This reduction in stamp duty will certainly stimulate the market,” said Andrew Seldon, Managing Director of John Shepherd
“Homeowners and purchasers across the West Midlands and Warwickshire will save money, have more confidence and, as a result, will be more likely to buy.”
“The reduction will also ease things for both the vendor and purchaser, helping to make more transactions happen. With the cut being effective immediately, I anticipate a large surge in both buyer enquiries and people interested in coming to market.”
To find out more or book a valuation for your property speak to one of the team at John Shepherd