Stamp duty shock is another headache for buyers

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, comments on the Chancellor’s Autumn Statement (17 November 2022), which shows that stamp duty shock is another headache for buyers.

Key points from the Statement:

• • Jeremy Hunt announced that the stamp duty cut would be reversed in 2025.
  • At that point, the nil rate threshold will be cut from £250,000 to £125,000.
  • The nil rate threshold for first-time buyers will fall from £425,000 to £300,000.
  • And the maximum purchase price which first time buyers’ relief can be applied to will fall from £625,000 to £500,000.

Sarah Coles says:

“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.”

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay