To help get the property market back on its feet in post-lockdown, the Government has put into action a stamp duty holiday which will stay in place up until the 31st March 2021.
Stamp Duty often acts as a barrier to most people who choose to buy a home, so with this new Government implementation, it should allow the Property Market to be more accessible to a wider range of the general public during the current times.
This holds hope from the Government that the temporary move will allow 9 out of 10 people who buy a home to be exempt from paying Stamp Duty.
Here’s how these changes may affect you:
Stamp Duty normally doesn’t affect First Time Buyers as they are already exempt up to £300,000. The holiday will only apply to properties up to the amount of £500,000, so if you are a First Time Buyer buying at that maximum figure then you would save £10,000 in Stamp Duty.
The ones who will mostly benefit from this will be the ones moving home. If you are moving home and the purchase is completed before March 31st 2020 then you will not pay Stamp Duty at all as along as the purchase price is <£500,000. The predicted average that the Governments thinks the Stamp Duty will fall by is £4,500 but for prices around £500,000 the savings will be £15,000.
The Stamp Duty surcharge still applies in this scenario. This was brought in so that more first time Buyers gained more opportunity to step onto the Property Ladder but Buy to Let Investors will still be better off than before.
Under the old system if you bought an investment property for £250,000, you’d have paid 3% on the first £125,000 and 5% on the second £125,000, resulting in a stamp duty bill of £10,000. During the holiday you will only pay 3% stamp duty on the whole purchase price, meaning a bill of £7,500.