Stamp Duty Land Tax has been cut in new growth plans announced by the Chancellor to help buyers on all levels of the property market, saving the average buyer in England £2,500 in tax on a home purchase and lifting up to 200,000 homebuyers every year out of paying the tax altogether.
Kwasi Kwarteng, the Chancellor of the Exchequer, said on Friday, September 23: “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.”
HM Treasury, the government’s economic and finance ministry, also tweeted: “We’re cutting Stamp Duty Land Tax which will help more people to move, promote residential investment and boost first-time ownership. All alongside our housing supply reforms in today’s Growth Plan.”
So what does this mean for those hoping to get on the property ladder?
According to Kwarteng’s announcement, the nil rate band for the average buyer will be doubled from £125,000 to £250,000. This means that an average of 200,000 more people can buy a home annually without paying any Stamp Duty.
Going even further to support first-time buyers, they will not be required to pay stamp duty on properties up to £425,000. The property value on which first-time buyers can claim relief will also be increased from £500,000 to £625,000. Previously, first-time buyers had a nil-rate band of £300,000, provided their property value did not exceed £500,000.
According to property website Rightmove, these new changes, which took effect from midnight Friday 23 September 2022, mean that a third of all homes currently for sale in England are now exempt from stamp duty.
These new rates provide a fresh incentive for first-time buyers, especially in London and the South East, where previously soaring home costs meant they faced colossal tax bills. Now, of the 200,000 buyers each year who will no longer have to pay stamp duty, 60,000 will be first-time buyers.