Chancellor Kwasi Kwarteng has announced a permanent cut to Stamp Duty for those buying a property.

He said that the tax cuts will help people on all levels of the property market and lift 200,000 homebuyers every year out of paying the tax altogether.

The changes take immediate effect.

What’s changed?

In his ‘mini-Budget, Kwarteng announced that he is increasing the zero-rate band before Stamp Duty is paid at all to £250,000, from its current level of £125,000.

This means homebuyers will pay no Stamp Duty on the first £250,000 of the property price.

The government said the standard buyer in England will save £2,500.

The Chancellor also said he is raising the zero-rate threshold for first-time buyers from its current level of £300,000 to £425,000.

He added that he will increase the value of the property on which first-time buyers can claim relief, from £500,000 to £625,000.

Scott Clay, distribution development manager at lender Together, said of the cuts: “The stamp duty cut will reduce the sky-high costs of buying a home, and ultimately provide needed support for first-time buyers and those who are looking to move soon.

“However whether this goes far enough to tackle the long-term issues within the market isn’t clear. With that said, this move will likely have a tempering effect, helping the housing market weather a slow down.”

Paresh Raja, CEO of Market Financial Soiutions, added: “The true impact of this move remains to be seen. One common theme of the stamp duty holiday in 2020-21 was that sellers inflated asking prices to account for buyers’ stamp duty savings.

“Will we see the same again? It is likely, to an extent at least. But this time around we have rising interest rates impacting the amount buyers can borrow, so that will also shape the way that house prices move.”