Earlier this year, the Chancellor of the Exchequer, Jeremy Hunt, announced Stamp Duty cuts that will remain in place until 2025. Finance experts and professionals are split on whether this cut will be beneficial to the housing Industry.
What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is a property transaction tax, that is applied to any property purchased over a certain threshold. The tax is paid by the person buying the property and can depend on the location, the amount you are paying for the property, and whether this is your sole property. The tax percentage will range between 0-12%, depending on the price of the property.
What are Stamp Duty Cuts?
Stamp Duty Cuts raise the thresholds on which tax needs to be paid. They often occur to boost the property market’s growth, during cost-of-living crises and inflation.
What is Changing?
In September, Jeremy Hunt stated that the threshold would be increased to £250,000 from £125,000, with the first-time buyer’s threshold also being increased to £425,000 from £300,000. These cuts will remain in place until March 2025.
What does this mean for you?
The stamp duty cut is beneficial for those who are in the process of, or thinking about buying a house. The amount of tax you need to pay on the property will be massively decreased, or even completely reduced to nothing. This will make the process much more affordable for many. With this in mind, first-time buyers can therefore have a much easier time getting onto the property ladder.
There is some concern that the lowering of stamp duty may drive up the price of housing. This would then make purchasing properties unaffordable for many people. Despite this, for potential buyers and especially first-time buyers, the SDLT cut should be taken advantage of!