The increase in the lower stamp duty on residential properties will have a significant impact on Northern Ireland's housing market, a leading expert has said.
The UK Chancellor Kwasi Kwarteng unveiled the plans in the House of Commons on Friday morning, where details of cuts to taxes such as stamp duty were announced as the government tries to limit the impact of soaring energy bills on households.
The mini-budget cut raises the threshold of how much a property has to cost before stamp duty is paid from £125,000 to £250,000.
Read more: What Chancellor's mini-budget announcement means for Northern Ireland
First time buyers currently pay no stamp duty on the first £300,000, but that will be raised to £425,000.
The move means around 200,000 homebuyers in Northern Ireland will escape having to pay any stamp duty tax altogether.
Stamp duty is a tax paid by homebuyers in Northern Ireland, based on the value of the property they are buying.
Previously, the first £125,000 of a property’s value was tax free. Buyers were then charged 2% of the value of the property above that threshold up to £250,000, and 5% on the portion between £250,001 and £925,000.
The government has now announced a permanent change to how the tax works, with the threshold at which buyers have to pay the duty rising from £125,000 to £250,000.
The Chancellor said: "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."
Mr Kwarteng said raising the threshold at which stamp duty is payable means a typical family moving into a semi-detached property will save £2,500 on stamp duty, adding that the move will help people on all levels of the property market.
Those in the process of buying a property should benefit from the tax break as it came into effect on Friday, almost a year after the last stamp duty holiday ended.
The reaction from property experts has been mixed, with some saying it will ease cost pressures on buyers in the short-term, while others warn it will cause house prices to spike.
Ian Creighton, Residential Property Partner at law firm Wilson Nesbitt said the move will significantly impact the region's housing market.
"The change to the lower end of the stamp duty relief to £250k makes a very material difference to the Northern Ireland housing market, with 69.5% of the properties currently listed for sale on one of the largest NI property hubs being marketed for £250k or less," he said.
"This is reflected in our own internal statistics, which reveal that in the last three months 75.6% of new enquiries related to properties up to a value of £250k.
"The increase from £125k to £250k means that 50.1% of those enquirers would now have a £0 stamp duty bill compared to before the change."
Jonathan Steen, Partner at Fetherston Clements Estate Agents, said the move is good news for prospective homebuyers and movers here but he doesn't foresee a sudden rise in house prices.
"The housing market is very much confidence driven and it doesn't take a lot to dent people's confidence in our market so a good news story like this can only help," Mr Steen told Belfast Live.
"In the last couple of years we've seen a very buoyant and positive housing market with very strong demand. The causes of that demand have been controllable and different perhaps than other rapidly rising housing markets where the repercussions have been difficult for us all.
"When you think back to around 2008 that market was so largely driven by investment and speculation and perhaps excessive lending and therefore we ran into problems."
Mr Steen added: "This time around the housing market has been driven by lifestyle changes and a change in people's needs and the view in what they want from their homes, whether that be working from home or being closer to their family and leisure activities.
"For that reason this housing market is sustainable and there are measures in place keeping it under sensible control and we're seeing this from our mortgage lenders and surveyors too."
Richard Ramsey, Chief Economist, NI Ulster Bank, said the hike in the lower zero rate stamp duty band to £250,000 is relevant to some but not all homebuyers here.
"If the abolition of the top rate of income tax was the rabbit out of the hat, the Stamp Duty Land Tax measures were perhaps the least surprising aspect of the Budget, given how heavily they were flagged.
"They will be largely irrelevant to first time buyers in Northern Ireland, who were already benefiting from paying no Stamp Duty up to £300,000, which accounts for almost all first-time buyer property purchased here.
"The increase to £425,000 will be of much more relevant to first time buyers in the South East of England. But other homebuyers in Northern Ireland will be much more interested in what the Chancellor announced.
"With the nil-band rate increased to £250,000, this means that most home purchases in Northern Ireland will now be exempt from Stamp Duty, including second home purchases, and buy-to-let investments. The latter two categories are subject to a higher SDLT rate (3% +)."
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