Autumn Statement 2022: Stamp duty cut will now end in 2025
In the Autumn Statement today, Jeremy Hunt reversed the plan to permanently raise the stamp duty threshold to £250,000, and instead this tax break will now end in March 2025.
This decision was introduced by his predecessor Kwasi Kwarteng just two months ago in the disastrous mini Budget.
Hunt said: “The OBR [Office for Budget Responsibility] expects housing activity to slow over the next two years, so the stamp duty cuts announced in the mini Budget will remain in place but only until March 31 2025.
“After that I will sunset the measure, creating an incentive to support the housing market and the jobs associated with it by boosting transactions during the period the economy most needs it.”
Stamp duty rates
In September 2022, the government increased the nil rate threshold of Stamp Duty Land Tax (SDLT) from £125,000 to £250,000 for all residential property buyers in England and Northern Ireland.
It also increased the nil-rate threshold paid by first-time buyers from £300,000 to £425,000, while the maximum purchase price for the relief was increased from £500,000 to £625,000.
“This will now be a temporary SDLT reduction. The SDLT cut will remain in place until 31 March 2025 to support the housing market and the hundreds of thousands of jobs and businesses which rely on it,” the government added.
Scott Clay, head of introducers at Together said the decision to sunset the stamp duty cut to March 2025 was “short-sighted”.
He said: “While this will likely force first-time buyers and those looking to move house to jump before they’re pushed and miss out on a good deal; our research shows there are swathes of potential borrowers who are considered non-standard by the mainstream market who are at real risk of being shut out altogether.
“While strong measures are needed to save our flailing economy, famine always follows feast.”
Richard Campo, founder of Rose Capital Partners, said: “Putting a deadline on the stamp duty changes is a really bad idea. The only good thing that came of the infamous mini Budget was that the stamp duty allowance wasn’t time limited.
“What always happens when you create a deadline? It creates a rush to hit the deadline which pushes up prices artificially, and also, what comes next? Going back to the current scheme or not? That wasn’t mentioned so the devil will be in the detail here.”
‘Enabling the housing market to perform’
Other experts were more sanguine about ending the permanent cut, hoping that by 2025, the UK economy and the housing market may have turned a corner.
Tomer Aboody, director of property lender MT Finance, said: “The government is maintaining the stamp duty reduction for now in the hope that banks can also be more flexible when it comes to mortgages. This will enable the housing market to continue to perform, along with associated businesses within the sector, which is so important for the wider economy.
“By the time, the stamp duty cuts are phased out by 31 March 2025 the UK should hopefully be in a much better place, particularly as long-term interest rates should be lower as inflation is brought under control.”
Emma Hollingworth, managing Director of mortgages, MPowered Mortgages, agreed.
She said: “The Chancellor’s decision to extend stamp duty cuts until 2025 is a very welcome measure that will bring a degree of continuity, stability and security to a market that continues to be at the whim of wider economic volatility.
“This will give those looking to buy a home time to consider their options and, with brokers’ support, to make the best decision for them, knowing that they can do not have to rush in order to benefit from the cuts.”