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Stamp duty cut in Mini Budget: UPDATED

Hollie Chapman
Content Manager

The new Chancellor, Jeremy Hunt, has announced the government is scrapping almost all of the tax measures set out in its mini-budget three weeks ago to “provide confidence and stability”.

Mini Budget Update: 17 Oct 22

What’s staying?

  • Cuts to National Insurance and cuts to Stamp Duty will remain

What’s going?

  • The planned 1p cut in the basic rate of income tax has now been scrapped and will “remain at 20% indefinitely”

  • Cuts to dividend rates have also been scrapped

  • Plans to repeal reforms to off-payroll working (IR35) have also been scrapped

The cap on energy bills is now guaranteed until next April but further support will be reviewed by the Treasury.

What was originally in the Mini Budget?

On 23rd September, the ex-Chancellor, Kwasi Kwarteng, announced a cut in Stamp Duty Land Tax, scrapped the planned rise in Corporation Tax and reversed the increase in National Insurance levies.

The ex-Chancellor also announced plans to scrap the 45p additional rate of tax in the Mini Budget. The government did a u-turn on these plans on 3 October.

Mini Budget 2022: What landlords need to know

Stamp Duty Land Tax cut

For investors adding to their portfolio, changes to the stamp duty thresholds will be welcome news.

  • From 23 September 2022, the SDLT threshold for residential property doubled from £125,000 to £250,000.

  • First-time buyers will now pay SDLT from £425,000

  • First-time buyers' relief can be claimed to up £625,000

The policy is part of the new government’s plan to ‘drive economic growth’ and aims to stimulate the housing market. It’s likely to lead to higher demand for property.

Investors looking to expand their portfolios could benefit from a greater choice of properties, however higher competition between buyers could push up prices. For landlords looking to sell, higher demand could mean quicker deal completions for higher prices.

Read our expert guide on stamp duty for buy-to-let landlords

“We saw how the temporary SDLT rates reduced by the government in 2021 fuelled purchases for investors and landlords, igniting the property market out of the Covid slump.

"This SDLT cut is permanent, and although we believe it will fuel growth for investors, it may not be as impactful as the reduction in 2021 due to higher interest rates on lending as a result of higher inflation. However, we are already seeing a number of investors looking to take advantage of the cut in SDLT for residential properties."

Nadeem Raziq, Provestor Head of Tax

National Insurance rise scrapped

  • From 6th November the government is cutting National Insurance by 1.25 percentage points and cancelling the Health & Social Care Levy.

The return to lower National Insurance rates will see landlords pay less tax on rental income. Limited company directors who are paid a salary from their company will save on both personal and business NI contributions.

At the time of writing, there is no update to the investment zones and infrastructure projects mentioned in the Growth Plan 2022.

Investment zones

  • Mentioned in the Growth Plan 2022, these are areas designed to boost housebuilding with reduced and streamlined planning applications.

Investment zones will also be able to designate specific tax sites that will benefit from a range of time-limited tax incentives over 10 years including:

  • relief on business rates

  • stamp duty land tax

  • enhanced capital allowance

  • enhanced structures and buildings allowance

  • relief on employer’s National Insurance contributions.

A list of 38 local authorities are under consideration as investment zones. It’s worth property developers and investors keeping a close eye on the investment zone factsheet for updates and early opportunities.

Infrastructure projects

  • The Growth Plan sets out a list of 138 major infrastructure projects that the government will prioritise for acceleration across transport, energy and digital infrastructure.

  • The majority on this list are road building and safety schemes, with wider infrastructure priorities including HS2 and nuclear strategy also included.

Areas with named projects could be considered for investment opportunity in serviced accommodation or short-term lets/Airbnbs.

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Hollie Chapman
Content Manager

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