The government are doing their best to get the property market going again. It’s been a rough few months, however, things are starting to pick up again. This recent government announcement should let things catch back up to speed.
As you may have heard, the government have announced that a stamp duty holiday will run until 31st March 2021. This will hopefully help get the economy back on its feet.
Stamp duty tax tends to be a common barrier that stops peoples from continuing through the home buying process. The government have introduced this move hoping that it will give buyers the confidence that they need. The housing market is a key part of the UK’s economy and it needs to resume back to how it was as fast as it can.
The government says the temporary move will mean 9/10 people buying a home during the exemption period won’t need to pay any stamp duty at all.
The changes have been taken into effect immediately, here how it might affect you:
Most First Time Buyers don’t pay stamp duty anyway as they are already exempt up to £300,000. This holiday applies to properties up to £500,000 though, so if you are a First Time Buyer buying at that maximum figure then you would save £10,000 in stamp duty.
Home movers moving up or down the property ladder are likely to be the biggest winners here. If you are moving and your purchase completes before March 31st 2020 then you will not pay Stamp Duty at all as long as the purchase price is <£500,000. The government predicts that the average stamp duty bill will fall by £4,500, but for properties priced at £500,000 the saving will be £15,000.
The stamp duty surcharge still applies (this was brought in to curb the number of investors buying homes that traditionally would have been bought up by First Time Buyers), but you will still be better off than before.
Under the old system, if you bought an investment property for £250,000, you’d have paid 3% on the first £125,000 and 5% on the second £125,000, resulting in a stamp duty bill of £10,000. During the holiday you will only pay 3% stamp duty on the whole purchase price, meaning a bill of £7,500.
Malcolm was on BBC Radio on 09/07/2020 to talk about the stamp duty statement and what he thinks of it, here is what he had to say: