It has been confirmed by the Chancellor, Kwasi Kwarteng in the recent mini budget that stamp duty will be cut.
This doubles the level at which people begin paying this from £125,000 to £250,000 which means we could see more first time buyers.
The permanent change comes into effect immediately.
This government is also committed to helping first-time buyers get on the property ladder in two ways:-
· by increasing the level first-time buyers start paying stamp duty from £300,000 to £425,000.
· by allowing first-time buyers to access the relief when they buy a property costing less than £625,000 rather than the current £500,000
These measures will reduce stamp duty bills across the board for all movers by up to £2,500 with first-time buyers able to access up to £11,250 in relief.
Under the new system, the first £250,000 of a property’s value will be exempt, and buyers will pay 5% of the value of the home from £250,001. The portion between £925,001 and £1.5m will continue to be taxed at 10%, and any property worth more than that will be subject to stamp duty rates of 12%.
The level at which first-time buyers have to pay stamp duty will rise from £300,000 to £425,000 in a move to increase home ownership. Under the plans, the first-time buyer relief will be applicable to properties worth up to £625,000, compared with the current £500,000.
People that are currently in the process of buying a property should benefit from the tax break as it comes into effect immediately so please contact your solicitor to ensure you get the discount.
Note: This will only apply in England and Northern Ireland. Stamp duty is not charged in Scotland, instead home purchasers pay Land and Buildings Transaction Tax, with rates set by the Scottish government.