In order to stimulate the housing market in the light of the pandemic, stamp duty has been scrapped for homes under £500,000. Chancellor Rishi Sunak predicted the move would benefit 9/10 homebuyers in England and Northern Ireland. For the uninitiated, stamp duty (or SDLT) is a tax necessary to pay if you buy a property or land over a certain price in England and Northern Ireland. In response to the first fall in house prices in 6 years, a “temporary cut until 31 March 2021” was announced, raising the threshold for paying stamp duty from £125,000 to £500,000. Sunak told MP’s that “the average stamp duty bill will fall by £4,500, and nearly nine out of 10 people buying a main home this year will pay no stamp duty at all.”
So how does this affect buyers? Well, stamp duty was formerly charged only on properties costing £125,000 or more, except for first-time buyers, who paid nothing up to £300,000 and then a rate of 5 per cent up to £500,000. For ‘next time buyers’, a rate of 2 per cent was applied to between £125,000 and £250,000 of a home’s value, and 5 per cent on the next £675,000 of a property’s worth (up to a value of £925,000). So first-time buyers looking to acquire a property for £500,000 will save £10,000, while next-time buyers will save £15,000. If you’re looking for more information or some insight on whether now is a good time to get on the property ladder, don’t hesitate to call, email or visit us so that you can speak to an experienced lettings agent and discuss your particular needs.
