- Kavi Patel – ITV News Multimedia Producer
Chancellor Rishi Sunak has announced a stamp duty holiday which will run until 31 March 2021 in a bid to boost the struggling housing market which has taken a hit due to the coronavirus pandemic.
Although the measure is temporary, it could have a lasting impact on people who are looking to buy homes at the lower end of the market.
What is stamp duty?
Stamp duty land tax (SDLT) is a lump sum payment those buying a property or piece of land over a certain price have to pay.
Prior to Wednesday, all house-buyers in England and Northern Ireland had to pay stamp duty on properties over £125,000, or if you were a first-time home buyer you did not need to pay stamp duty unless the property you were buying was more than £300,000.
The rate a buyer has to pay varies depending on the price and type of property – usually you would expect to pay more stamp duty if the property is worth more.
Landlords pay an extra 3% of stamp duty when they purchase a buy-to-let property.
What has Chancellor Rishi Sunak announced on stamp duty?
The cost of stamp duty on homes up to £500,000 has been suspended, potentially saving future house buyers tens of thousands of pounds.
Mr Sunak announced he has decided to cut stamp duty, telling the Commons: “Right now, there is no stamp duty on transactions below £125,000.
“Today, I am increasing the threshold to £500,000. This will be a temporary cut running until March 31 2021 – and, as is always the case, these changes to stamp duty will take effect immediately.
“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.”
How much could you save on stamp duty? Experts have said a stamp duty holiday will encourage more home owners to move, enabling a further kickstart to economic activity in other sectors”.
Comments by Chuk Agudosi (Truuli Property Expert)
From my professional prospective, Wednesday 8th July was certainly a significant day for the property industry. The chancellor’s announcement regarding the stamp duty holiday is a welcome boost for both buyers and sellers alike.
If you’re hoping to buy a property then there is of course an obvious saving especially for those in London where the cost of purchasing a home is so much higher than in the rest of the UK. In fact the saving could be as much as £15,000!
It is however also really good news for those homeowners who are selling and potentially upsizing as they stand to profit twice. Firstly they can expect to see an increase in potential purchasers looking at their home. They also then profit on their onward purchase (with a saving with from the Stamp Duty Holiday) as well as the likelihood of potentially more properties available for them to consider as more homeowners look to take advantage of the Stamp Duty Holiday.
Let’s not forget that the recent housing market has been disadvantaged firstly by the ‘Brexit cloud which had been hovering for the best part of 4 years then just when there appeared to be clearer skies (Jan/Feb 2020) the Coronavirus Lockdown came into effect.
So great and welcome news from Rishi Sunak and a fantastic opportunity for anyone who was considering buying or selling to take advantage……remember the Stamp Duty Holiday is only available to March 31 2021.
Chuk Agudosi – Truuli Property Expert