Chancellor Kwasi Kwarteng has announced changes to the stamp duty system that, commentators have already predicted, are likely to significantly stimulate the lower end of the property market and, in particular, first time buyer (FTB) activity.
The zero-rated range for all purchasers rises from £125,000 to £250,000 while the zero rate paid by first-time buyers rises for homes worth up to £425,000. This is an increase from £300,000.
Also, the value of homes that FTBs can claim this zero-rate relief on rises to £600,000, a sop to struggling young aspiring buyers in London and the South. This means FTBs buying a £500,000 property, for example, will now pay zero stamp duty on the £425,000 portion of the value, but pay 2% on the remainder.
Also new homes will have no stamp duty on at all
“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,” said Kwarteng (main pic).
The announcement is the first permanent change to the house purchase tax system since November 2017 when the FT zero rate up to £300,000 was introduced.
Since then several ‘holidays’ have been implemented all related to stimulating the economy post-Covid, although these ended on 1st October last year.