Chancellor Kwasi Kwarteng has announced a cut to stamp duty in his mini-budget.

The new Chancellor, speaking in the House of Commons this morning, said the changes would mean an extra 200,000 people would now avoid having to pay the tax.

Mr Kwarteng said: Home ownership is the most common route for people to own an asset, giving them a stake in the success of our economy and society.

“So, to support growth, increase confidence and help families aspiring to own their own home, I can announce that we are cutting stamp duty. 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.”

Mr Kwarteng also said the stamp duty threshold for first-time buyers would be increased from £300,000 to £425,000.

Glasgow Times: PAPA (Image: PA)

He added: “We’re going to increase the value of the property on which first-time buyers can claim relief, from £500,000 to £625,000.

“The steps we’ve taken today mean 200,000 more people will be taken out of paying stamp duty altogether. This is a permanent cut to stamp duty, effective from today.”

What is stamp duty?

Stamp duty is a tax paid by anyone purchasing a property.

How it works and how much you pay varies depending on the country of the UK in which the property is being bought, and the price of the property.

What are the rules in Scotland and Wales?

In Scotland, buyers pay Land and Buildings Transaction Tax and the rates are:

  • £0-£145,000 (£175,000 for first-time buyers) - 0%
  • £145,001-£250,000 - 2%
  • £250,001-£325,000 - 5%
  • £325,001-£750,000 - 10%
  • £750,001+ - 12%

In Wales, buyers pay Land Transaction Tax and the rates are:

  • £0-£180,000 - 0%
  • £180,001-£250,000 - 3.5%
  • £250,001-£400,000 - 5%
  • £400,001-£750,000 - 7.5%
  • £750,001-£1.5m - 10%
  • £1.5m + - 12%

Landlords in Scotland and Wales pay an extra 4% on top of standard rates.