Video: How people will be affected by Stamp Duty changes
Sep 27, 2022
Martin Lewis has provided a positive update for households who earn less than £50,000 after Chancellor Kwasi Kwarteng unveiled his mini budget.
The Money Saving Expert founder has been keeping the nation up-to-date with the latest news as the cost of living crisis worsens. The finance guru is known for his switching and money-saving tips, but recent events have left even him at a loss at how to help people.
Mr Kwarteng put forward a number of changes in parliament which on the outlook seem more beneficial to rich households, but Mr Lewis composed an "explainer" video to help explain how exactly people will be affected by Stamp Duty, National Insurance and Income Tax.
Part of the Mr Kwarteng's "new growth plan" was to cut Stamp Duty, with the nil rate band doubling from £125,000 to £250,000. This means 200,000 more people every year will be able to buy a home without paying any Stamp Duty at all - and the standard buyer in England will save £2,500, according to Gov.uk.
Mr Lewis said many fans have asked him if they will still get the new rates if they have exchanged homes but not completed: "In general yes, stamp duty is crystallised at completion (though there can be some exceptions - check with your solicitor)."
Anyone buying a house worth between £250,000 and £900,000 will pay a 5% Stamp Duty, he said. Using a £300,000 property as an example: "You pay no Stamp Duty on the first £250,000, you pay 5% on the remaining £50,000, which is £2,500. Previously, you would have paid £5,000."
First time buyers purchasing a property worth up to £650,000 will not pay any Stamp Duty on the first £425,000 - compared with £300,000 previously.
On Income Tax, the basic rate has dropped to 19% (from 20%). People currently start paying Income Tax when their earnings reach £12,570, though this may change when the budget is announced next year.
Martin Lewis composed an 'explainer video' to help explain how exactly people will be affected by the new changes.
Anyone earning this amount or more will have more take home pay. Though, he added: "For anyone earning £50,000 and over, you don't really get any more gain. The gain is really on the income between £12,570 and £50,000".
These changes apply to England and Northern Ireland only. As always, Martin Lewis is clear, concise and to the point.
