Archive: What the Stamp Duty cut means for home buyers
On 23rd December 2022, the new Chancellor announced a change to the Stamp Duty Rate*. This is a permanent change and there is currently no end date for this rate change. In this article we look at what the Stamp Duty cut means for home buyers and whether it is likely to stimulate the market.
Adam Nanson, impartial mortgage broker for Your Mortgage Expert comments.
How much tax will I need to pay if I purchase a property?
“In the Chancellor’s mini budget, he announced a significant change to the current Stamp Duty rates. The aim of this cut is to get the housing market moving and support first-time buyers to put down roots**.
“With immediate effect, there will be no Stamp Duty Land Tax to pay on residential properties purchased in the UK with a value of less than £250,000. The amount you pay in Stamp Duty then goes up in increments according to the purchase price.
“On top of this, for First Time Buyers, there will be no Stamp Duty to pay on residential properties with a purchase price of up to £425,000.
“To find out how much you will pay on Stamp Duty Land Tax for your purchase, see the Government’s SDLT Calculator.”
What about stamp duty rates for Buy to Let properties?
“If you are purchasing an additional property either to live in or to rent out, you will pay more Stamp Duty. You will usually have to pay an additional 3% on the Stamp Duty rate. There are different rates if the purchase is being made by a Company or a Corporate Body. As this can be quite complicated, we would recommend you speak to an accountant who is a specialist in tax regulations.”
Will the Stamp Duty Cut stimulate the property market?
“Over the past few months, there have been some concerns of a flattening off of the property market. This SDLT cut is designed to stimulate the market, but it remains to be seen how much of an impact it will have.
“Following the mini budget, there have been rumours that the Bank of England may be forced to increase the base rate to tackle inflation. In response to this, many lenders have pulled products and put up rates. All of which will impact mortgage affordability and potentially squeeze out the number of people who can afford a mortgage.
“Having said this, latest research by Barrows and Forrester has found that cuts to stamp duty could help boost the number of property market transactions by 26%***. The previous stamp duty holiday undoubtedly boosted the market and it is hoped that this latest Government Initiative will do the same.”
If you are thinking about purchasing a property and you are wondering what the Stamp Duty cut means for home buyers, why not get in touch? We have contacts across the market, including specialist tax advisers to help you with your purchase. We also have knowledge of all the Government schemes designed to give you a helping hand.
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