In a bid to help first-time property investors and home buyers, Prime Minister Liz Truss will be presenting measures in the mini-budget.
Truss has been working on plans with Kwasi Kwarteng, Chancellor of the Exchequer for the past month. And these plans will be announced in the mini-budget tomorrow.
The Prime Minister says that by boosting economic growth, the whole country would prosper. Therefore, Truss will be introducing measures to cut down taxes.
Furthermore, other measures like creating low-tax zones, and cutting National Insurance, among others will be presented in the mini-budget. Truss said, “I don’t accept this argument that cutting taxes is somehow unfair,”
Encouraging First-Time Property Investors And Home Buyers To Invest In UK Residential Property
In the matter of the housing market, Truss believes that cutting stamp duty will help encourage economic growth.
Once stamp duty is cut, it will get first-time property investors and home buyers interested in investing in property. The cut will also encourage other property investors and landlords to invest in more properties around the country.
According to Truss, getting first-time property investors and home buyers on the housing market will be “critical” to the UK’s economic growth.
How The Stamp Duty Holiday Encouraged First-Time Property Investors and Home Buyers During The Covid-19 Pandemic
In the second quarter of 2021, gross mortgage lending reached nearly £90 billion. This growth prompted an increase in house prices. Between November 2020 and November 2021, the average house price rose by more than £26,000. Nevertheless, property purchases continued to hold strong into 2022. As of February 2022, nearly 47,000 residential property purchases were recorded.
The stamp duty holiday ended on 30 September 2021. With the return to regular rates, there is no stamp duty levied on the first £125,000 of any property purchase. Then, a 2 per cent stamp duty is levied for properties valued between £125,001 and £250,000. This stamp duty then increases to 5, 10, and 12 per cent, depending on the property’s market value.
For first-time property investors and home buyers, the threshold for stamp duty is £300,000.
Truss Doesn’t Care About Popularity; Boosting Economic Growth Is More Important
The reality is that stamp duty is a big source of income for the government. It raises an average of £12 billion a year. And Truss’s plan to cut stamp duty will undoubtedly make her very unpopular.
But the PM says she is willing to be unpopular so long as she’s pushing measures that will help boost economic growth and benefit the whole country.
“What is important to me is that we grow the British economy because that’s what will ultimately deliver higher wages, more investment in towns and cities across the country, that is what will ultimately deliver more money into people’s pockets, and it will also enable us to fund the services like the National Health Service.”
“I don’t accept this argument that cutting taxes is somehow unfair. Not every measure will be popular. This is about growing the size of the pie. If that means taking difficult decisions, yes, I’m prepared to make those decisions.”
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