What Impact Will The Stamp Duty Cut Have on Buyers?

The chancellor Kwasi Kwarteng has doubled the threshold at which buyers start paying stamp duty to £250,000. The move, which is now in force, was announced in his mini budget on 23 September. The chancellor also increased the point at which first-time buyers pay stamp duty to £425,000.

Mr Kwarteng said: “The steps we’ve taken today mean that 200,000 people will be taken out of paying stamp duty all together.”

However, some commentators have questioned whether the benefits of the cut could be cancelled out by rising mortgage interest rates. Zoopla’s Research Director, Richard Donnell said, “Stamp duty changes are welcome and will boost some sectors of the market. But overall, they are unlikely to offset the impact of higher mortgage rates on housing activity.”

The previous threshold, at which the tax was payable, was £125,000 for most purchasers or £300,000 for first-time buyers, who can now claim tax relief on amounts up to £625,000 – compared to a previous figure of £500,000.

In practice, the change means a saving of £2,500, based on an average £543,517 London house price (according to ONS figures).

The new stamp duty rates for first home are:

The cut is a permanent one, unlike the stamp duty holiday introduced by the previous chancellor Rishi Sunak. No changes were announced to the stamp duty surcharge paid on additional properties.

Read more about this story on the Evening Standard Homes & Property and Zoopla websites.