Designed to give the property market a boost following the coronavirus crisis, a stamp duty holiday was revealed in the summer budget by the chancellor, Rishi Sunak, who said the move is to help people feel “confident to buy, move and renovate.”
Under the new scheme, which starts with immediate effect, anyone buying a home as their main residence and paying up to £500,000 won’t have to pay any stamp duty (the tax you have to pay when buying a property). This stamp duty holiday, which applies to England and Northern Ireland only, began on 8th July 2020 and will stay in place until 31st March 2021.
The temporary raising of the tax threshold is hoped to encourage more buyers to move and help the property market get moving again following the effects of the coronavirus pandemic.
What this mean for property buyers
Before the introduction of the stamp duty holiday on 8th July 2020, only homes below £125,000 and first-time buyers spending up to £300,000, were exempt from paying stamp duty. Now however, anyone who buys a property worth £500,000 will enjoy the tax relief too. It’s worth noting the stamp duty holiday will replace the first-time buyers discount. This significant shifting of the threshold will see buyers save on average £4,500, and nine out of ten buyers won’t have to pay any tax on their property purchase at all.
For those buying properties for more than £500,000, they will only be charged tax on their value above that amount, as outlined below:
|Property Value||Stamp Duty|
|Up to £500,000||0%|
|The next £425,000 - £500,001 - £925,000||5%|
|The next £575,000 - £925,001 - £1.5million||10%|
|The remaining - Above £1.5million||12%|
The change will also include second homes, though investors will be subject to the existing 3% stamp duty surcharge.
Welcome news for property buyers
The chancellor’s announcement has been welcomed by many of those in the property industry and, perhaps not surprisingly, buyers across the country. A strong property market has a positive effect on the rest of the economy and gives buyers the confidence and incentive they need to make their dream move. The stamp duty holiday will help everyone purchasing a property save a significant amount of money, allowing them to take that first step on the property ladder or grasp a rung that was previously out of reach.
If you’re looking to take advantage of the government’s new stamp duty holiday scheme, Morrish Homes has a number of beautiful new build properties available from developments across Dorset, Somerset, Cornwall and Hampshire. For more information on a development near you, click here to register your interest.