Among the measures he outlined were tax cuts and energy bills support.
He also announced stamp duty cuts.
What is stamp duty?
According to Government information, you pay stamp duty, also known as Stamp Duty Land Tax (SDLT), if you buy a property or land over a certain price in England and Northern Ireland.
The tax is different if the property or land is in:
- Scotland – where you pay Land and Buildings Transaction Tax
- Wales – where you pay Land Transaction Tax if the sale was completed on or after 1 April 2018
The Government says you pay the tax when you:
- buy a freehold property
- buy a new or existing leasehold
- buy a property through a shared ownership scheme
- are transferred land or property in exchange for payment, for example, you take on a mortgage or buy a share in a house
How is stamp duty calculated?
According to the Government, stamp duty only applies to properties over a certain value.
The amount you pay depends on:
- when you bought the property
- how much you paid for it
Rates are different depending on whether the property is residential, a second home or buy-to-let.
You can use the stamp duty calculator to work out how much tax you’ll pay.
As a guide, rates for a single property (if it is the only residential property you own) are as follows:
- Up to £250,000 you pay no stamp duty
- The next £675,000 (the portion from £250,001 to £925,000) you pay five per cent
- The next £575,000 (the portion from £925,001 to £1.5m) you pay 10 per cent
- The remaining amount (the portion above £1.5m) you pay 12 per cent
(You usually pay 3 per cent on top of these rates if you own another residential property).
As an example, if in October 2022 you buy a house for £295,000. The stamp duty you owe will be calculated as follows:
- 0 per cent on the first £250,000 = £0
- 5 per cent on the final £45,000 = £2,250
- total stamp duty = £2,250
What did the Chancellor say about stamp duty in his mini-Budget?
Stamp duty has been cut in England and Northern Ireland.
The threshold before stamp duty is paid has been doubled to £250,000, but for first-time buyers, the threshold has been raised by £125,000 to £425,000.
The chancellor said the changes to stamp duty are “effective from today”.
In his mini budget he said: “In the current system, there is no stamp duty to pay on the first £125,000 of a property’s value. We are doubling that to £250,000.
“First-time buyers currently pay no stamp duty on the first £300,000. We’re increasing that threshold as well, to £425,000.
“And we’re going to increase the value of the property on which first-time buyers can claim relief, from £500,000 to £625,000.”
He added: “This is a permanent cut to stamp duty, effective from today.”
What else was announced in the mini-budget?
Other new measures include cutting the basic rate of income tax to 19p in April 2023 and abolishing the 45 per cent top rate of tax for higher earners.
As well as this, the cap on bankers’ bonuses has been lifted, and Mr Kwarteng announced that a planned rise in corporation tax has been scrapped.
An increase in National Insurance has been reversed and will be effective from 6 November, and low-tax investment zones will be set up across the UK.
What has been the reaction?
Shadow Chancellor Rachel Reeves told MPs said the Prime Minister and Chancellor “are like two desperate gamblers in a casino chasing a losing run”.
She said: “These stamp duty changes have been tried before.
“Last time the Government did it, a third of the people who benefited were buying a second home, a third home or a buy-to-let property.
“Is that really the best use of taxpayers’ money when borrowing and debt are already so high?
“The Chancellor has made clear who his priorities are today – not a plan for growth, a plan to reward the already wealthy.
“A return to the trickle-down of the past, back to the future, not a brave new era.”