23rd September 2022

What the stamp duty cut means for you

The mini-budget announcements from Chancellor Kwasi Kwarteng today included plans to cut stamp duty tax in England and Northern Ireland, in an attempt to boost the economy. What does this mean for buyers, sellers and property auctions? We’ve detailed our take on this below. 

The stamp duty tax cut, effective from today, raises the threshold of how much a property has to cost before stamp duty is paid to £250,000, a jump from £125,000 previously. It also means that first time buyers, who before, paid no stamp duty on the first £300,000, will see this raised to £425,000, and the value of the property on which first-time buyers can claim relief has been increased from £500,000 to £625,000.

The news of this permanent cut means that 200,000 more people will be taken out of paying stamp duty altogether.

Commercial purchases have also been considered, with Kwarteng confirming that the government is setting up “new investment centres”, adding that low-tax investment zones could be set up in almost 40 areas. He said: “there will be accelerated tax reliefs for structures and buildings, and 100% tax relief on qualifying investments in plants and machinery, on purchase of land and buildings for commercial or new residential developments. There’ll be no stamp duty to pay whatsoever on newly occupied business premises. There’ll be no business rates to pay whatsoever, and if a business hires a new employee into the tax site, then on the first £50,000 they earn, the employer will pay no national insurance whatsoever.”

The permanency of the cut means the rush we saw in the post-covid stamp duty tax holiday is minimised. 

Andrew Parker, Managing Director and Auctioneer at SDL Property Auctions said: “We welcome any measures taken to enable people to get on the property ladder or to make new property purchases. The permanence of this step will also help to remove any strain on our colleagues in conveyancing who experienced such high-demand during the previous stamp duty holiday. It’s also encouraging to see the talk of the creation of investment zones across the country, which will help to support the wider property market and not just residential.” 

Although largely welcomed, there have been a few concerns that this cut could cause house prices to soar yet again, at a time where mortgage rates are already on the rise, and at the highest they’ve been in 14 years. 

Property auctions, naturally, cut out much of the stress and strain of buying and selling a property altogether, as there are fixed completion timeframes, and often no chains, making them a faff-free and risk-free choice.