Buyers currently pay stamp duty after £125,000 of a home’s purchase price, but from today that threshold is being doubled to £250,000. This means buyers no longer pay stamp duty tax on the first £250,000 of a property purchase.
The threshold at which first-time buyers will pay stamp duty will be increased to £425,000, raising it from £300,000.
Before today’s announcement, stamp duty relief was not available for any first-time buyer home priced over £500,000. This threshold will now be raised to £625,000.
The Chancellor said: “Homeownership is the most common route for people to own an asset giving them a stake in the success of our economy and society, so to support growth, increase confidence and help families aspiring to own their own home I can announce that we are cutting stamp duty.”
He continued: “The steps we’ve taken today mean that 200,000 people will be taken out of paying stamp duty all together. This is a permanent cut to stamp duty effective from today.”
According to the Government’s Growth Plan, today’s measures “will reduce stamp duty bills across the board for all movers by up to £2,500 with first-time buyers able to access up £11,250 in relief.”
The average London sold house price now stands at £543,517 according to ONS which, until today, would have equated to a £17,175 stamp duty tax bill for a home buyer. Now, the amount of stamp duty payable will be £14,675, a saving of £2,500.
For a London first-time buyer, now able to claim stamp duty relief on properties priced up to £625,000, the amount of stamp duty payable on the average London home will now be £5,925.
The average UK house price is £292,000 according to Land Registry, meaning buyers of the ‘average home’ will pay stamp duty on £42,000 of the purchase price rather than £167,000 of it. From today, the stamp duty payable on the average UK home will be £2,100 rather than £4,600 — a saving of £2,500.
Today’s changes will apply only in England and Northern Ireland. Stamp duty tax is not charged in Scotland, instead buyers pay Land Buildings Transaction Tax. Similarly, stamp duty is not charged in Wales where buyers pay Land Transaction Tax.