Stamp Duty cut to end in 2025 as Autumn Statement is announced
Chancellor Jeremy Hunt took to the dispatch box to announce his long-awaited Autumn Fiscal Statement. Anticipated as the fix to ‘mini budget’ announced by former Prime Minister Liz Truss, Hunt announced a wave of tax rises to help curb inflation. As far as the housing market is concerned, it emerged relatively unscathed. However, the previously promised Stamp Duty cut will now come to an end in 2025.
The key talking points
In September’s mini budget, Liz truss (and then-Chancellor Kwasi Kwarteng) announced a change to the Stamp Duty thresholds. Since then, it doesn’t need to be paid on the first £250,000 of any property purchase – doubling the original threshold. For first-time buyers, that threshold was raised from £300,000 to £425,000. The decision was taken in order to encourage more people onto the property ladder. However, due to the market reaction following the budget, Hunt has now put a time limit on the cut.
The other big talking points for the market following the statement regard affordability. With a £55bn fiscal hole to fill, Hunt announced a wave of tax rises and austerity measures. The Chancellor admitted that disposal income will fall across the country as energy bills rise. The energy price cap will now increase to £3,000 per year come April. This raises concerns over household affordability nationwide. The threshold at which the country’s highest earners begin to pay the top rate of tax has also been lowered. This change sees the threshold move from £150,000 to £125,140. A freeze on all income tax thresholds until 2028 was also announced, meaning millions will pay more in tax as their wages rise.
In some positive news, Hunt did commit to a rise in the National Living Wage to £10.42, as well as pledging a further £6bn to insulating the country’s housing stock. This comes as a part of the Government’s target of reaching net zero carbon emissions by 2050. Hunt also confirmed that the state pension ‘triple lock’ will be protected, with state pensions now set to rise 10.1% to match inflation.
It’s safe to say that with living standards now expected to drop at record levels, there are tough times ahead. As advisers, you have an integral part to play in helping your clients achieve what they want in the face of financial adversity. As always, we’re committed to working closely with you to provide the best possible service for your clients.