TEMPORARY STAMP DUTY HOLIDAY
BREAKING NEWS: The chancellor today has announced a temporary holiday on stamp duty on the first £500,000 of all property sales in England & Northern Ireland and with immediate effect, which is HUGE news for the property market.
In his announcement of this stamp duty cut, which starts today and will last until 31 March next year, anyone completing on a main residence costing up to £500,000 between dates 8 July 2020 and 31 March 2021 will not have to pay any stamp duty & more expensive properties will only be taxed on their value above that amount. This could potentially save buyers as much as £15k buying a property of £500k or more.
The move aims to help buyers who have taken a financial hit because of the coronavirus crisis and essentially means that buyers could now potentially save thousands of pounds in purchasing their next home….
… making NOW the ideal time to buy!
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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 8th July 2020 all house-buyers in England & Northern Ireland paid stamp duty on properties over £125k 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 £300k. The rate a buyer had to pay varied, and you would have expected to pay more stamp duty if the property was worth more or was indeed your second property. A Landlord previously paid an extra 3% stamp duty when they purchased a buy to let property.
Stamp duty rates being different in Scotland and Wales.
The cost of stamp duty on homes up to £500k has been suspended and will potentially save future home buyers tens of thousands of pounds.
Mr Sunak announced this stamp duty cut 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.”
But what does this mean if you are first time buyer?
The threshold has been increased to £500k which would allow potential home buyers to look on the lower end of the housing market to avoid having to pay stamp duty for a significant period of time. If a first-time buyer purchases a property for £500k the new system could allow them to save £10k on stamp duty, compared to the previous rate.
This stamp duty holiday will boost transactions and provide a stimulus through the additional spending that is associated with moving house.
The winners and the losers
As with any decision there are winners and losers…
The chancellor’s announcement should give a welcome boost to the housing market which in turn will have positive knock-on effects for the wider economy with this stamp duty cut.
However, for people who have did finally manage to complete on a purchase of their home during the lockdown period or immediately afterwards, this will come as a bitter blow.
WITH INTEREST RATES AT AN ALL TIME LOW & NEWS OF THIS STAMP DUTY HOLIDAY…
…NOW IS THE TIME TO BUY!
THE SKY’S THE LIMIT
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