Autumn Statement: Stamp duty holiday “created” after Hunt reverses Liz Truss policy

The government’s move to reverse Liz Truss’s stamp duty cut will effectively create a new stamp duty holiday, as the nil threshold will move back from £250,000 to £125,000 in 2025.

For first-time buyers the rate where no tax is paid will fall from £425,000 to £300,000, while the maximum price at which first time buyers’ relief can be applied will fall from £625,000 to £500,000.

Tom Bill, head of UK residential research at Knight Frank, said: “By reversing the stamp duty cuts announced in September from April 2025, the government has effectively announced a 28-month stamp duty holiday.

“It may help stimulate activity closer to the deadline but it appears to contradict the message sent by the government during the pandemic that a liquid housing market was good for social mobility and had wider economic benefits.”

When delivering the announcement in the House of Commons, Chancellor Jeremy Hunt said:  “The OBR 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 all the jobs associated with it by boosting transactions during the period the economy most needs it.”

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, worried that the move could lead to some buyers over exposing themselves by rushing through purchases – when they’d be better served to wait and see.

She said: “Property buyers will have been thrown into a quandary by the announcement on stamp duty. Right now, the market is sending out every possible signal that they might want to hang fire, because we could be reaching the peak. So it will make their decisions even harder now that Jeremy Hunt has warned them if they wait too long, they’ll end up paying more stamp duty.

“This could end up providing a useful short-term boost to the market. By moving from an open-ended stamp duty cut to a limited opportunity, it could hurry through more sales, and help to keep the market ticking over until March 2025, when there’s a reasonable chance we will be out the other side of the recession.

“However, this may not be the best outcome for buyers. The desire to save tax could force them to buy sooner than they otherwise would, and expose them to the risk of property price drops. Meanwhile, if they decide to hold on for the bottom, they could end up rushing for the end of the stamp duty break along with so many others that they end up paying over the odds.

“Buyers already have incredibly tough decisions right now, and this announcement won’t have made it any easier.”

Nathan Emerson, chief executive of Propertymark, said: “Our member agents say the raised stamp duty threshold has had a positive effect on the confidence of their buyers and sellers, so we’re naturally disappointed it will be phased out by 2025.

“Stamp Duty is not only a barrier to entry to the property market, it restricts downsizers from releasing much needed family homes for second steppers. Bands that better represent house price growth and affordability are key to keeping the market moving.”

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