Chancellor Kwasi Kwarteng has introduced permanent stamp duty cuts for some home-buyers in the recently announced ‘mini-budget’.
Stamp duty is a tax payable to the government when you buy a home or land priced above a certain threshold.
Previously, you would pay stamp duty on a home or the portion of a home priced between £125,001 - £250,000. However, after the recent announcement, this number has changed, and now the threshold sits at £250,000. So, if you buy a home for less than that figure, you will not be obligated to pay the stamp duty.
This means a third of all homes currently for sale are now completely exempt from stamp duty in England, compared to 7% when the threshold still sat at £125,000.
The rules for first-time buyers have also changed, before the announcement first-time buyers could buy a property for up to £300,000 and not pay stamp duty. This figure has now increased to £425,000.
These changes will reduce stamp duty bills across the board by up to £2,500, with first-time buyers being able to save as much as £11,250 on stamp duty relief.
How Will This Impact the Housing Market?
Our estate agents predict that this announcement will stimulate more demand from home buyers. If these stamp duty cuts lead to an increase in prospective buyers competing for a limited number of properties for sale, this could lead to price rises over the next few months.
However, because this change is more permanent, and because of other contributing factors such as rising mortgage rates, our estate agents think this demand will be a more gradual increase in comparison to the surge after the 2020 stamp duty holiday was announced.
If you would like to talk more about the housing market, and what the stamp duty reduction could mean for you, contact our estate agents How to find out more.