You will no doubt have heard by now that the Chancellor of the Exchequer, Rishi Sunak, announced a stamp duty holiday until the end of March 2021 as part of his measures to help boost the UK economy following the impact of coronavirus. Whilst we all jumped for joy at this great assistance, what you might not know is how this could benefit you in your search for a new home. Well that’s where we thought we could help, by explaining what this fantastic move from the government can do to help you with your move.
For those who find all this house buying stuff a minefield; stamp duty is a tax paid by people buying properties, although it varies slightly across the country. In England and Northern Ireland stamp duty is paid on land or property sold for £125,000 or more. However, first-time buyers were paying 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 are 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.
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 31 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 Chancellor estimates that the average stamp duty bill will fall by £4,500, whilst nearly nine out of ten people buying a main home this year will pay no stamp duty at all.
The holiday is effective immediately from today (9th July 2020) and will last until 31 March 2021.
These facts and figures are all well and good, but what does it actually mean for you? Well the more you pay, up to the new £500,000 threshold , the more you could save on stamp duty. Before the stamp duty holiday, if you bought a house for the average price on the Isle of Wight of £250,593 (Rightmove figures) you could pay up to £2,529 in stamp duty, if you were a customer taking your next step on the ladder with much more to pay if you plan to keep another property. So if you’re already buying a house that’s an extra £2,529 in your pocket to put towards your deposit, new furniture, or maybe even a holiday when the situation allows.
If you’ve been thinking about taking the plunge, what could be a better time? Lockdown has made many people think about the benefits of moving to a new home with more outside space and enough room inside to work from home. Our West Acre Park development offers all of this and more, with high speed internet connectivity making working from home even easier, and beautifully landscaped surroundings giving a real feel of countryside living but with the town and beach close at hand. The stamp duty holiday could make a real difference to the type of property you can afford too. We work closely with award winning L&C, the UK’s leading fee free mortgage broker, who are excited to talk to our prospective purchasers about the difference this stamp duty holiday can make to your affordability. Get in touch to find out how much you could save on your next step on the property ladder.