What the stamp duty cut means for house buyers

As part of its mini budget the government has announced a significant stamp duty cut, here’s what that means for potential house buyers.

Stamp Duty Land Tax (SDLT) is a property transaction tax that is paid in increasing portions of the property price. Previously SDLT payments started after the first £125,000 of the property price for previous owners and £300,000 for first time buyers. The rate then went up proportionally based on the value of the property ranging from 2% to 12%.

The government has announced that from today the threshold for stamp duty has been increased to £250,000 of a property for previous owners, and £425,000 for first time buyers. The change is permeant and effective immediately.

The new policy means that as many as 200,000 people will no longer have to pay any stamp duty and many others will pay significantly less than they were before.

In the previous system, when moving home the total SDLT owed for a house priced at £250,000 would be £2,500. The cut means that that buyer will now pay nothing.  Likewise, a first-time buyer purchasing a house worth £425,000 would owe £6250 in SDLT but will now save that figure.

Samantha Hart, Sales and Marketing Director at Allison Homes, said: “This change to the stamp duty is great news for homebuyers as it means that, if eligible, they can now save thousands of pounds on the purchase of the property.

“At Allison Homes we’re all about helping people find their dream home, which is why we would highly encourage property seekers to take advantage of this opportunity and start making enquires right away”.