The mini-budget presented by the Chancellor of the Exchequer is Liz Truss’s government’s first significant fiscal action. The new budget has a very strong focus on real estate. The budget is aiming to keep people investing in the property market and so benefits property investors.
- Stamp duty
- No duty on first £250,000 of property’s value, up from £125,000
- First time buyers – No duty on first £425,000 of property’s value, up from £300,000
Impact on real estate?
The changes to Stamp Duty Land Tax (SDLT) will greatly benefit investors. The threshold has increased to £250,000 for all property purchases and £425,000 for first-time home buyers. This exemption of Stamp duty is an excellent perk for real estate investors as it will reduce the amount of tax one pays.
The Bank of England has also been increasing interest rates to counteract inflation. Rising interest rates normally negatively impacts the market as people become more barish on purchases and this leads to a dip in house prices. However, this change to stamp duty should incentivize people to keep buying property.
Since the beginning of Covid crisis, the property market across the board has fared extremely well. However, recently the market has begun to see a slow down. The objective of the stamp duty measures is to minimize hurdles, boost the number of sales so that individuals can get on the housing ladder and keep the property market strong.