For anyone who has been living under a rock, Rishi Sunak announced a Stamp Duty Holiday that will start with immediate effect.
So, what does this mean for those wanting to sell their property?
Chancellor Rishi Sunak’s landmark announcement of a stamp duty holiday until the end of next March is a huge boost for home buyers that will help get people moving and save movers thousands of pounds.
The tax threshold for home purchases has been temporarily increased from £125,000 to £500,000, in a move that has been widely welcomed by home hunters and the housebuilding industry.
Under the changes, homebuyers will not pay any tax on main homes up to £500,000 until 31 March 2021.
It has been calculated that the average stamp duty saving will be around £4,500, with nine out of ten buyers this year now paying no stamp duty at all on purchases. The change will also include second homes, however, investors will still be subject to the three per cent stamp duty surcharge.
What is Stamp Duty?
Most run-of-the-mill residential property purchases over a certain amount (£125,000 in England and Northern Ireland) now require tax to be paid. This tax is known as Stamp Duty, or – to go by its full name – Stamp Duty Land Tax.
The amount you would usually need to pay depends on a few things, such as:
- Where you live. Stamp Duty rates, bandings and discounts vary between England & Northern Ireland, Scotland and Wales.
- The value of your new property. There are varying rates of stamp duty, depending on how much your property is being purchased for. The more expensive it is, the higher the tax bracket.
- Whether you’re a first-time buyer. First-time buyers get a discount on their Stamp Duty. How much of a discount depends on where you live.
- Whether you own other properties. If you own other properties, expect to pay higher stamp duty rates.
My advice to potential buyers and sellers is to act fast.