While there seems to be a lot of uncertainty around the world at the moment, one thing that is proving robust is the housing market – thanks to quick but strong decisions from the Chancellor earlier this month.
By removing stamp duty on the first £500,000 of a property purchase if you’re moving home, and adjusting rates on second homes, Rishi Sunak has helped keep the housing market not only buoyant but invigorated.
Our conveyancing team at Woodfines has recently seen a spike in enquiries, indicating that people are already making the most of these savings. If others don’t act soon, they could miss out.
So, what exactly has he done?
Firstly, for anyone looking to move home, the first £500,000 of your purchase no longer carries any stamp duty, after that it’s a sliding scale on the rest.
So, if you’re buying a home less than £500,000 you pay nothing. This will mean significant savings for anyone moving home. For example, you’ll save £5,500 on a property worth £310,000 and up to £15,000 on a property worth £500,000
You will still pay stamp duty on homes above the £500,00 threshold and this is worked out on a sliding scale.
- 5% on £500,001 to £925,000
- 10% on £925,001 to £1.5 million
- 12% on anything above £1.5 million
These rates apply whether you’re a first-time buyer or moving home.
Secondly, property investors have been given an incentive too. While you’ll still pay stamp duty on a second home valued at more than £40,000 at the following sliding scale:
- 3% on £0 to £500,000
- 8% on £500,001 to £925,000
- 13% on £925,001 to £1.5 million
- 15% on anything above £1.5 million
Whether you’re buying outright or with a mortgage, this applies to both freehold and leasehold properties. However, caravans are exempt.
While this is welcome news, it is only for a limited time and as the saying goes, all good things come to an end.
The Chancellor has said that this stamp duty holiday will end on 31 March 2021, any sale not completed by then will pay stamp duty at the rate the Chancellor decides going forward.
There is no word yet if the rates of stamp duty will simply revert to how they were before his 8 July announcement, or if he will calculate new figures. Either way, the advice is don’t delay if you want to make the most of this chance to make significant savings.