Stamp duty changes 2022

Stamp Duty Changes

Within the last month, there has been major changes to stamp duty, brought in by the then Chancellor Kwasi Kwarteng. It has been confirmed by the new Government that the stamp duty changes will continue to take place. So what does this mean for property investing?

First of all, what is stamp duty?

Stamp duty is the tax paid from the buyer when a house is purchased. Before the recent stamp duty changes, no stamp duty needed to be paid for a house, or portion of a house worth up to £125,000. This number has now doubled to £250,000 for all purchases and £425,000 for first time buyers. 

For example, previously the stamp duty on a home worth £350,000 was 5%, meaning first time buyers were paying an additional £17,500 in stamp duty tax on their purchase. Now, first-time buyers will not be paying any tax at all on a home worth the same amount.

Why have these stamp duty changes come in?

According to the Government, they predict a positive economic impact from the stamp duty threshold changes as reductions in rates, or increases in the thresholds, support house purchases, property transactions and house prices. Increased property transactions add to residential investment and spending on durable goods.

How will this affect the property market?

We don’t expect there to be a surge in house prices like there was during the Covid-19 Pandemic, mainly due to consistent increases in interest rates from the Bank of England. However, this could help prolong a stabilisation in prices and prevent a steep drop.

How does this affect Prism Properties and property investors?

With these stamp duty changes, this is one less expense for Prism Properties to incur when purchasing a property, especially for properties up to £250,000 which the majority of our previous investments have been purchased at.

This is a saving we can pass on to our investors to help keep our property investment returns healthy and beyond the current rate that average savings accounts return.

If you’re considering investing in property and don’t know where to begin, fill in our contact form on this page and we’ll be in touch!

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