In the Government’s summer statement, Chancellor of the Exchequer Rishi Sunak announced temporary reduced rates for stamp duty. From 8 July 2020 until 31 March 2021, homebuyers purchasing a property up to £500,000 will be exempt from paying any stamp duty in England and Northern Ireland.
As an estimated 9 out of 10 people purchasing a main home won’t have to pay any stamp duty, this creates a unique window for homebuyers. The stamp duty holiday applies for first-time buyers and those who have owned a property before. The stamp duty threshold was previously at £300,000 for first-time buyers and £125,000 for other purchasers.
Stamp duty is calculated upon the day of completion. And as these changes come into effect immediately, any purchases that complete from 8 July 2020 to 31 March 2021 will be eligible for the stamp duty exemption.
Across England, the stamp duty holiday equates to £2,465 of savings for the average buyer, according to estate agent Barrows and Forrester. And homebuyers purchasing a property for £500,000 will save a whopping £15,000. This tax change could help some buyers to afford a more expensive property or allow them to spend more on renovations or decorations.
The stamp duty holiday is an effort to kick-start the property market and economy and is expected to boost demand and confidence. It will help first-time buyers step onto the property ladder and those looking to upsize or downsize.
Other stamp duty rates
When buying a residential property with a value between £500,001 and £925,000, the buyer will only pay 5% stamp duty on the amount within that bracket. Then, any portion from £925,001 to £1.5m will be charged at 10%, and any amount above £1.5m will be taxed at 12%.
Buyers who are purchasing a second property will be charged the revised standard stamp duty rates and additional property rates. For additional residential properties, only 3% will be charged on property values up to £500,000, while 8% will be due on the amount between £500,001 and £925,000, 13% between £925,001 and £1.5m and 15% on any portion above £1.5m.
Welcome news for the property sector
Many property professionals see this tax holiday as welcome news, giving both buyers and sellers more confidence. It’s expected to give the entire sector a boost and will likely lead to a flurry of transactions and further increase demand.
The changes in stamp duty rates are set to be in place for just over eight months, giving interested buyers plenty of time to take advantage of this opportunity for significant savings. And paired with record low mortgage interest rates, it could prove to be an advantageous time to buy a property.
Salboy has property developments available across Greater Manchester. We have introduced a range of safety measures in place so you can safely view our properties under social distancing guidelines. If you are actively looking to move and would like to book a viewing, please send us a message online or call us on 01925 947 015.