WHAT DO THE STAMP DUTY CHANGES MEAN FOR ME £££
The much-rumoured Stamp Duty cut has been confirmed, increasing the thresholds before the property tax is paid.
Delivering his mini-Budget this morning, Chancellor Kwasi Kwarteng increased the point at which Stamp Duty is charged - read the full article to see what savings this could mean for you
The much-rumoured Stamp Duty cut has been confirmed, increasing the thresholds before the property tax is paid.
Delivering his mini-Budget this morning, Chancellor Kwasi Kwarteng increased the point at which Stamp Duty is charged on property purchases from £125,000 to £250,000 for home movers (a saving of up to £2,500)
The threshold for first-time buyers will increase from £300,000 to £425,000 and can be used on purchases worth up to £625,000. (a saving of up to £11,250)
The Growth Plan also promised to release more Government land to support housebuilding and to remove planning restrictions to boost supply.
Kwarteng said: “Economic growth isn’t some academic term with no connection to the real world. It means more jobs, higher pay and more money to fund public services, like schools and the NHS.
“This will not happen overnight but the tax cuts and reforms I’ve announced today – the biggest package in generations – send a clear signal that growth is our priority.
“Cuts to Stamp Duty will get the housing market moving and support first-time buyers to put down roots. New Investment Zones will bring business investment and release land for new homes in communities across the country. And we’re accelerating new road, rail and energy projects by removing restrictions that have slowed down progress for too long.
“We want businesses to invest in the UK, we want the brightest and the best to work here and we want better living standards for everyone.”
How will this help stimulate growth?
Growth is a government’s 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.
Doubling the nil-rate band will enable up to 29,000 more people to move home each year, in turn boosting household consumption, which will increase confidence in the economy and support the hundreds of thousands of jobs and businesses which rely on the property market. This includes, for example, estate agents, cleaners, builders, contractors, removals companies, plumbers, decorators and others.
This policy is a tax-cut for hard-working people and will allow them to keep more of the money they earn. This tax cut will boost household consumption, increase economic confidence, and support jobs.
How the government is helping first-time buyers?
For first time buyer the expenses which come with buying a new home can be off-putting. to help them the government raising the amount they can spend on a new house without paying any Stamp Duty. The nil-rate threshold will be raised from £300,000 to £425,000. The government is also increasing the maximum property purchase price which will qualify for First Time Buyers’ Relief from £500,000 to £625,000.
In addition to the Growth Plan’s stamp duty measures, The Lifetime ISA helps buyers save money. This is a long-term savings product intended to support younger people saving for their first home, or for later life to save up to £4,000 into their account each year until their 50th birthday, receiving a 25 per cent Government bonus on those savings. Since 2017, more than 118,0000 individuals have used these accounts to help fund their property purchase.
Since 2016, more than 1.1 million new dwellings have been built in England, increasing the supply of homes. Since spring 2010, over 774,000 households have been helped to purchase a home through Government-backed schemes including Help to Buy and Right to Buy. The Government operates a range of relevant schemes which make home ownership more affordable.
Case study 1 – first time buyer in London
Average London house price (Land Registry Data July 2022) - £543,500
Original SDLT bill – £17,175 (First Time Buyers wouldn’t have been eligible for First Time Buyer’s Relief under the old system)
New SDLT bill – £5,925
Saving is £11,250 (-65%) (£2,500 due to nil-rate band up to £250k and £8,750 due to First Time Buyer’s Relief changes)
Case study 2 – standard home mover
Average England House Price (Land Registry Data July 2022) - £312,000
Current SDLT bill - £5,600
New SDLT bill - £3,100
Saving is £2,500 (-45% of original bill)
Background on Stamp Duty Land Tax
Stamp Duty Land Tax (SDLT) is a tax you pay whenever you purchase a house in England or Northern Ireland.
Different rates of SDLT are paid on properties depending on their price once they pass a threshold, which from today will be £250,000.
Property Value / Standard Residential Rates
£0 – £250,000 / 0%
£250,000 - £925,000 / 5%
£925,000 - £1,500,000 / 10%
£1,500,000+ / 12%
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Souces: Gov.co.uk / Estate Agents today