In September 2022, the then Chancellor of the Exchequer announced a number of measures aimed at bolstering the residential property market. In his controversial ‘Mini Budget’ speech on 22nd September 2022, Kwasi Kwarteng revealed cuts to Stamp Duty Land Tax (SDLT).
Coming into place the day after the announcement, 23rd September 2022, and specific to property transactions in England and Northern Ireland, the immediate reliefs are part of a wider package of measures designed to help fuel the economy’s growth.
The entry level at which Stamp Duty Land Tax will apply to residential property has increased from £125,000 to £250,000. This represents a tax saving of £2,500 for any house purchases where the price exceeds £250,000.
Specific measures aimed at first time buyers sees the level at which stamp duty is applicable increase from £300,000 to £425,000. Furthermore, first-time buyers will now be able to access relief on properties costing up to £625,000, rather than the previous £500,000. The changes mean a nil rate band on purchases up to £425,000 and a 5% flat rate on the portion of the price between £425,000 and £625,000.
The government claims that the measures will take more than 200,000 buyers out of paying stamp duty altogether. The new rates and thresholds will remain unaffected by the 3% levy on second and additional homes.
The Stamp Duty cuts will be a welcome benefit for those amid property purchases. With property prices having seen a significant increase over the last couple of years, first time buyers may stand to benefit from the increased threshold. Some, however, argue that due to the lack of supply of houses on the market, the SDLT cuts will fuel further price increases.
Further to the SDLT plans, it was also announced that the government will introduce investment zones across the country. Originally capped at 38, the invitation to become an Investment Zone has been extended to all local authorities. Investment Zones will see businesses receive favourable tax treatment alongside being able to benefit from a relaxation of planning rules to allow business development.
The long-awaited reforms to planning regulations under the Department for Levelling Up, Housing and Communities are expected in the coming weeks. It is expected the reforms will lift planning restrictions and encourage rapid development of new housing by removing some of the barriers currently in place for developers.
Those looking to purchase a new home are welcomed to contact our team to discuss how the new rates will apply to them.
For more information on any of the information in this article, or to enquire about our conveyancing services, please contact us on 01457 761320.
