Stamp tax has been cut for all homebuyers as part of the new Conservative government’s plan to help turn the economy around.
Chancellor Kwasi Kwarteng announced tax rates on personal property or land purchases, there will now be a higher threshold before it must be paid.
He told MPs the change came into effect from today when he announced a series of economic changes as part of a “small budget”.
Here are the new price thresholds, then stamp duty must be paid:
• After the first £250,000 for those who have purchased a property before (was £125,000)
• After the first £425,000 for first time buyers (currently £300,000)
• For first-time homebuyers over £425,000, they will receive a 5% discount from that price up to £625,000 (currently up to £500,000)
Example of how much stamp duty a homebuyer will have to pay:
• £312,000 house (average UK house price): £3,100 now (previously £5,600)
• £312,000 home for first time buyers: Stamp duty now £0 (previously £600)
• £400,000 house: Now £7,500 in tax (previously £10,000)
• £400,000 home for first time buyers: Stamp duty now £0 (previously £5,000)
• £600,000 house: Now £17,500 (previously £20,000)
• £600,000 home for first time buyers: Now £8,750 (previously £20,000)
The median house price in London is £543,500, the latest Land Registry figures for July revealed.
Announcing the cuts, Mr Kwarteng told MPs: “The steps we have taken today mean that another 200,000 people will be completely removed from paying the stamp duty.
“This is a permanent cut to the stamp duty, effective from today.”
Stamp tax is paid only in England and Northern Ireland, with homebuyers in Scotland paying a land and building transaction tax, set by the Scottish government.
In Wales, the buyer must pay the Land Transaction Tax, which is set by the Welsh government.