Chancellor Kwasi Kwarteng has announced that stamp duty will be cut.
In future, there will be no stamp duty on the first £250,000 of a property purchase, instead of £125,000.
First-time buyers will only pay SDLT on homes over £425,000, up from £300,000. First-time buyers' relief is available on properties up to £625,000, up from £500,000.
No change has been announced for additional property SDLT surcharges.
These changes take effect immediately.
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Next year’s planned increase in Corporation Tax is cancelled - this will therefore remain at 19 per cent, the lowest level in the G20 economies.
From April 2023 the basic rate of Income Tax will be cut from 20p to 19p. The government will also at that time scrap the 45p additional rate completely "to attract global talent and incentivise employment."
Kwarteng says the past approach of governments, increasing taxes to a 70-year high, will not be continued. Instead, via tax cuts, a trend rate of growth of 2.5 per cent per year is Truss government objective; this will turn ‘vicious cycle of stagnation’ into ‘virtuous cycle of growth.’
In terms of property and related issues, Kwarteng has also announced:
- There will be long-term reform of the planning system to be outlined by the Levelling Up and Housing Secretary, Simon Clarke, in the coming weeks. A new Bill will “unpick planning restrictions” with “streamlining” of processes. To boost housing supply, there will be an accelerated release of government-owned land;
- In the shorter term, specific Investment Zones will be identified for faster development with tax reliefs up to 10 years, and no stamp duty for some commercial and job-generating businesses in those areas;
Kwarteng says there are three priorities for the government:
- Reforming supply side of economy;
- Responsible public finances;
- Cutting taxes to promote growth.
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Other specific measures announced today include:
- Incentives for those out of work to return to the labour market, or risk reduced benefits;
- Minimum service levels, by law, to reduce strike action in key industries;
- Pension fund investments will be unlocked to allow investment into targeted growth projects;
- Bonus cap for City bankers scrapped;
- Enterprise Investment Scheme and Share Option plans will be enlarged;
- Office of Tax Simplification wound down, with the process devolved to all departments;
- Guarantee that Bank of England financial independent will be maintained;
- VAT-free shopping for overseas visitors;
- Planned duty rate increases for alcohol will be cancelled;
- National Insurance increases proposed for 2023 cancelled, as announced earlier this week, without reducing spend on HNS and social care services;
Kwarteng has also released details of the government’s already-announced energy intervention:
These will cost some £60 billion for the next six months, involving multiple steps:
- Household energy price guarantee, limiting household bills for the next two years to typically £2,500 per year; Existing plans to give £400 off bills for all households this winter - more for vulnerable individuals;
- Price guarantee for all businesses equivalent to that of households;
- An Energy Market Finances scheme, giving 100 per cent guarantee to banks to offer liquidity loans to energy suppliers.
- Combined, these energy measures will drop inflation by circa 5.0 per cent.