Stamp Duty Changes
Stay up to date: Stamp Duty Changes
The COVID-19 pandemic and subsequent lockdown have taken a huge toll on the UK economy. Thousands of people have been made redundant, millions are on furlough, and many businesses are still unable to trade as normal. As a result, a lot of experts fear a property crash is on its way.
In an effort to stave off any potential drop in house values, and boost the post-lockdown economy, the Government recently announced significant changes to UK stamp duty. For those currently in the process of buying a property, and those thinking about moving home, this news couldn’t come at a better time. Keep reading to find out more.
Stamp duty holiday
Following widespread criticism that government inaction could cause the UK property market to grind to a halt, chancellor Rishi Sunak recently announced a Stamp Duty Holiday. While not all buyers will get away without paying the tax, the threshold has been moved from £125,000 to £500,000. This means those buying property worth up to half a million pounds won’t pay any stamp duty at all, while those buying homes over the threshold will make considerable savings.
Why do we need a stamp duty holiday?
The COVID-19 crisis has caused a huge drop in the number of people buying and selling property. In May, just 48,450 properties were sold in the UK. That’s compared to 96,050 during the same period last year, a fall of almost 50%.
As the health of the property market is a major indicator of the health of the overall economy, it’s essential the sector remains strong. The Government hopes that cutting stamp duty will help to encourage house hunters to make a purchase and give the economy the kickstart it needs.
What the stamp duty holiday means for you
If you’re currently in the process of buying a property, or if you’re on the hunt for your new home, these changes could have a significant impact on your finances. While first-time buyers don’t pay stamp duty on properties worth up to £300,000, other buyers are required to pay the tax on homes worth £125,000 or more. The stamp duty holiday means that, if the house you’re buying or the properties you’re looking at are less than £500,000, you won’t pay any stamp duty at all. This will save the average buyer around £4,500.
If the house you’re planning to buy is £500,000 or more, you’ll save an impressive £15,000 on your stamp duty bill. The money you save could be put towards redecorating, furnishing or renovating your new property or it may mean you’re able to stretch to a more expensive home that you would have been able to afford otherwise.
The stamp duty holiday announced by the chancellor is scheduled to end on 31st March 2021. So if you want to take advantage of the current rates, you need to start your property search as soon as possible.
Find out more about what’s happening in the housing market, and learn about the services we offer, by exploring our site or getting in touch with Richard or Wayne today.