Prime Minister plans to announce move to cut stamp duty in the mini-budget this week

It has been widely reported that the Prime Minister, Liz Truss is to unveil plans to cut SDLT (Stamp Duty Land Tax), widely known as stamp duty in the government’s mini-budget this week in an attempt to drive economic growth.

Ms Truss and Kwasi Kwarteng, the Chancellor, have been reportedly working on the plans for some time and will announce them on Friday. Although it remains to be seen what the cuts will be exactly, and whether there are plans to improve housing supply to keep up with potential demand, the Prime Minister has made it clear she wishes to keep taxes low in a bid to stimulate growth in the economy.

Currently, stamp duty is payable on residential property purchases above certain thresholds, with a tiered system depending on the value of the house.

Expert Opinion

“SDLT is a bad tax that inhibits the market and is excessively complex and unfair. There are not many levers available to the Government right now, but this is a good one to pull. From what we know so far, this is likely to stimulate confidence and activity in the market, both of which are needed in order to help people secure the accommodation that is right for them, and to help prevent further backsliding of the economy. We eagerly await the detail as the industry as a whole was not expecting this, and requires certainty as to exactly what is proposed and how it will affect current transactions, as soon as possible.”

“Clearly however this is still just a timely intervention during somewhat critical circumstances. The overall position with regard to a terrible lack of housing supply, high energy costs, environmentally poor housing stock and the need for a stable, well-funded planning system remain key issues that it is vital the Government now moves to the top of their agenda.” Jeremy Raj - Partner

Fridays mini budget is expected to announce further tax cuts including a commitment to withdraw the National Insurance Contribution (NIC) increase for the Health and Social Care Levy, benefitting those in employment, including substantially greater benefits for those earning the most.