Stamp Duty is paid by the buyer of any property and can cost thousands of pounds.
This is a permanent cut to the Stamp Duty threshold of how much a property has to cost before stamp duty is paid. Before the announcement, one had to pay Stamp Duty on any property above £125,000. That threshold has been increased to £250,000.
As stamp duty is paid on completion, anyone currently buying a property will benefit from this as it is applicable from today on any house purchase in England and Northern Ireland.
Anyone buying a second home will also save this money (although they will still have to pay the additional 3% levy for second homes)
Stamp Duty now starts at £250,001 at 5% for next £675,000 (the portion from £250,001 to £925,000).
You only pay 5% on the amount over £250,000 (ie If you buy a house for £325,000, you only pay 5% on the difference between £325,000 and £250,000 i.e. £75,000 - 5% of £75,000 is £3,750)
Liz Truss and the Chancellor Kwasi Kwarteng believe that cutting stamp duty will support economic growth by encouraging more people to move home or jump on the property ladder.
Stamp Duty also decreases labor market elasticity as it curtails people from selling up and buying elsewhere, where the jobs are.
This is great news for anyone looking to move home in the next few months as it will save them up to £2,500, money that could be used to make the house move easier
The government also committed to helping first-time buyers get on the property ladder in two ways. Firstly, by increasing the level first-time buyers start paying stamp duty from £300,000 to £425,000.
In addition, the government is allowing first-time buyers to access the relief when they buy a property costing less than £625,000 rather than the current £500,000.
According to the Chancellor, these measures will reduce stamp duty bills across the board for all movers by up to £2,500 with first-time buyers able to access up £11,250 in relief.
The announcement comes less than 24 hours after the Bank of England raised the interest base rate to 2.25%.