Chancellor announces stamp duty cut and £2bn new green homes grant
Chancellor Rishi Sunak’s summer statement outlined new measures aimed at the housing market.
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The threshold at which people start paying stamp duty has been lifted from £125,000 to £500,000.
The change, effective immediately, is a temporary measure designed to boost the housing market. The measure will remain in place until 31 March 2021 next year.
Properties over £500,000 will pay stamp duty, however the rising of the nil rate band means they will pay £15,000 less than before.
The Chancellor said the government pressed ahead with this decision in order to stimulate more deals in the market, encourage people to move home and support jobs.
Oliver Knight, a Partner in Knight Frank's Residential Research team, said: “Today’s announcement provides a welcome boost to property transactions across the market and comes at a time when activity levels and interest have already started to recover following the two-month market shut down. Clearly, the Chancellor recognises the multiplier effect that moving house can have on the UK economy with more money spent on DIY projects and renovations.
“However, while a temporary holiday will bring forward housing market and economic activity, as well as helping to address affordability concerns surrounding the up-front cost of moving, a wider re-think of property taxes is still needed to reduce the distortive effect SDLT has on property markets and maximise any stimulus the government plans to provide to the UK economy.”
Purchasers currently liable for the higher rate additional 3% stamp duty, will still be required to pay the surcharge on the full property value, though they too will benefit from the raised nil rate band.
Back in April, Knight Frank said a material cut in stamp duty or an extended SDLT holiday should be central to efforts to revive the market in the wake of the shutdown.
Sunak also announced plans to spend £2bn on a Green Homes Grant scheme. These measures should make 650,000 homes more energy efficient.
The scheme will see households receive vouchers worth up to £5,000, and up to £10,000 for low-income households, to use on environmentally friendly additions such as insulation, low-energy lighting and double glazing.
In addition, there will be £1bn of funding to reduce greenhouse gas emission from public sector buildings, such as schools, hospitals, and social housing.