EYE NEWSFLASH: Stamp duty cuts to save thousands of pounds for homebuyers – full details announced

EYE NEWSFLASH: Stamp duty cuts to save thousands of pounds for homebuyers - full details announced

Chancellor Kwasi Kwarting confirmed the permanent reduction of stamp duty in the mini-budget announced this morning.

The government is reforming the stamp duty by doubling the level at which people start paying this amount from £125,000 to £250,000.

This government is also committed to helping first time buyers get on the real estate ladder in two ways. First, by increasing the level of first-time buyers, they start paying stamp duty from £300,000 to £425,000.

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In addition, the government is allowing first-time buyers to access relief when they buy a property that costs less than £625,000 instead of the current £500,000.

These measures will reduce stamp duty bills across the board for all carriers by up to £2,500 with first-time buyers able to access up to £11,250 in relief.

The government says growth is its top priority, and by taking these measures it will boost the real estate market, thus helping businesses expand to help support the growth of the broader economy.

Doubling the zero rate range will enable up to 29,000 more people to move into their homes each year, which in turn will boost home consumption, which will increase confidence in the economy and support thousands of businesses that depend on the property market. This includes, for example, real estate agents, cleaners, builders, contractors, removal companies, plumbers, decorators, and others.

This policy is a tax cut for people who work hard 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.

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The government is committed to fiscal sustainability by ensuring that the economy grows faster than our debt and keeping debt as a proportion of our economy on a downward trajectory.

First time buyers

For the first-time buyer, the expenses that come with buying a new home can be deferred, to help them increase the amount they can spend on a new home without paying any stamp duty. They will not pay now if their first home costs less than £425,000, an increase of £125,000 over the current limit.

If a first-time buyer spends more than £425,000, they will now be entitled to a waiver – meaning they will pay 5% SDLT – up to £625,000, an increase of £125,000 over the current limit.

In addition to the growth plan stamp duty procedures, the Lifetime ISA standard helps buyers save money. This is a long-term savings product aimed at supporting young people who save for their first home, or for later life to save up to £4,000 in their account each year until their 50th birthday, and receive a 25% government bonus on this savings. Since 2017, more than 118 thousand people have used these accounts to help finance the purchase of their real estate.

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Since 2016, more than 1.1 million new homes have been built in England, increasing the supply of homes.

Since the spring of 2010, more than 774,000 families have been helped to purchase a home through government-supported schemes including Help to Buy and Right to Buy. The government administers a range of related schemes that make home ownership more expensive. More details about all of these schemes and others including right-to-buy and discounted sales are available on the state home ownership website. The website also contains details of eligibility requirements so that people can select the scheme best suited to their needs.

potential savings table

SDLT fee for Standard Domestic Drive (GBP) SDLT fee for Standard Domestic Drive (GBP) SDLT fee for first time buyer (GBP) SDLT fee for first time buyer (GBP)
Price (£) As of September 22, 2022 Until September 23, 2022 savings (£) As of September 22, 2022 Until September 23, 2022 savings (£)
200,000 1500 0 1500 0 0 Unavailable
400,000 10000 7500 2500 5000 0 5000
600,000 20000 17500 2500 20000 8750 11,250
England (median house price based on land registry data as of July 2022) 312000 5600 3100 2500 600 0 600
property value Standard Residential Prices
0 GBP – 250K GBP 0%
£250,000 – £925,000 5%
925 000 GBP – 1500 000 GBP 10%
1,500,000 GBP + 12%

This is a permanent procedure and will only apply in England and Northern Ireland. Stamp duty is not levied in Scotland, instead homebuyers pay land and building transaction tax, with rates set by the Scottish Government.

Housing industry reacts to stamp duty decision

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