Kwasi Kwarteng announces stamp duty reduction – 200,000 households will no longer pay property tax | Personal finance | Finance

Mr Kwarteng confirmed the property tax cut when speaking in the House of Commons this morning. The move by Prime Minister Liz Truss’ government is seen by many as an attempt to spur growth. Addressing MPs, the Chancellor said: ‘I can announce that we are reducing stamp duty. This is a permanent stamp duty reduction, effective as of today. As part of the reduction, no stamp duty will have to be spent on homes up to £250,000 and for first-time buyers the threshold will rise to £425,000.

Stamp duty is a tax levied on purchases of real estate or documents in England and Northern Ireland.

Transaction tax has been paid on any property purchased over £125,000.

Higher rates are paid by taxpayers based on certain thresholds. Different property taxes apply to those buying property in Scotland and Wales.

Earlier this week, rumors of stamp duty cuts sent shares of British homebuilders skyrocketing on the London Stock Exchange.

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Key CEO Will Hale noted that the stamp duty reduction is likely to be “popular” among homeowners.

He added: ‘The stamp duty changes are likely to be particularly popular and Mum and Dad’s Bank is likely to see an increase in business as people look to family members for help. ‘assistance.

“We saw £1million of home equity freed up during the stamp duty holiday as older family members sought to help children and grandchildren take their first steps on the ladder. , so it will be interesting to see the impact of these changes.

“With rates rising and high street lenders more cautious than ever about what they will allow people to borrow, having a large deposit is likely to be even more important.”

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What are the stamp duty rates?

According to the government website, here is a list of the current stamp duty rates for a single property:

  • Up to £250,000 – zero percent
  • The next £675,000 (the £250,001 to £925,000 part) – Five percent
  • The next £575,000 (the £925,001 to £1.5 million part) – 10%
  • The remaining amount (the part above £1.5m) – 12%

As part of the mini budget announcement, the zero rate bracket will be doubled from £125,000 to £250,000.

This means an additional 200,000 Britons will be able to buy a home without having to pay stamp duty each year.

The average household moving into a semi-detached property will save £2,500 on stamp duty and £1,150 on energy bills.

If they have a combined income of £50,000, families will save an additional £560 on taxes, which is a saving of around £4,200 in total.

On top of that, the government has announced support for first-time buyers who will no longer pay stamp duty up to £425,000 – down from £300,000 previously.

The value of property on which first-time buyers can claim reduced relief will increase from £500,000 to £625,000.

When will stamp duty be abolished?

In his speech, Kwasi Kwarteng confirmed that the property tax reduction will take effect from midnight today (Friday 23 September 2022).

He also announced additional help for home buyers by increasing the surrender of surplus government land to build new homes.

On today’s changes to stamp duty and the promise to help people get on the property ladder, Simon Bath, the CEO of iPlace Global, called the Chancellor’s Budget ‘good news’ .

“The Chancellor’s announcement to build more homes across the country is good news for the market.

“However, the government must ensure that support is provided at all ends of the spectrum – from those looking to buy their first home to those struggling to pay their mortgages.

“New programs need to be introduced to replace old ones like Help to Buy, especially for those who cannot afford to climb the ladder.”

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