Stamp duty holiday a big boost for homebuyers!
Chancellor Rishi Sunak has announced a stamp duty holiday which will run until 31 March 2021 in a bid to boost the housing market following the coronavirus pandemic.
The government has increased the lower stamp duty threshold to £500,000 for property sales in England and Northern Ireland. That means any property purchases below the new level will not need to pay stamp duty as long as the deal is completed before 31st March 2021.
People buying second homes and buy-to-let properties will also benefit, but will still have to pay the 3% extra duty due on the entire price.
The move is aimed at helping buyers who have taken a financial hit because of the coronavirus crisis.
Chancellor Rishi Sunak said: "The average stamp duty bill will fall by £4,500. And nearly nine out of 10 people buying a main home this year, will pay no stamp duty at all."
Who pays stamp duty and how much?
In England and Northern Ireland stamp duty was paid on land or property sold for £125,000 or more. However, first-time buyers previously paid no tax up to £300,000 and 5% on any portion between £300,000 and £500,000.
For people who have bought a home before, stamp duty rates were 2% on £125,001-£250,000, 5% on £250,001-£925,000, 10% on £925,001-£1.5m, and 12% on any value above £1.5m. That means someone spending £248,000 - the average cost of a house - would have previously paid £2,460 in stamp duty to move home.
Landlords still pay an extra 3% of stamp duty when they purchase a buy-to-let property in England and Northern Ireland.
How much can buyers save?
As an example, if you buy a property for £400,000 in England and you're not a first-time buyer, you would usually pay £10,000 (made up of £2,500 on the portion between £125,001 and £250,000, and £7,500 on the portion between £250,001 and £400,000).
But for now, you'd pay no stamp duty on the property at all – saving you £10,000.
The Chancellor has said the average saving will be £4,500.
Can I still benefit if I've already completed a purchase?
The holiday applied from 8th July 2020, which means anyone completing a property purchase before that date will have to pay the full normal stamp duty. If you have exchanged, but not yet completed, you WILL be able to take advantage of the stamp duty holiday.
More information on the stamp duty holiday can be found on the government’s website HERE.
If you’re not sure how this could affect you, or you’d like to take advantage of this fantastic news, please get in touch and we’d be happy to help you save money!