On 8th July, Chancellor Rishi Sunak announced a variety of changes in his ‘mini-budget’ to help get the economy back on its feet after the covid-19 pandemic. One key feature is a stamp duty holiday, which will run until 31st March 2021, to encourage the housing market to bounce back bigger and better.
What is stamp duty?
Stamp duty is a tax paid by people buying houses. It is also often referred to as Stamp Duty Land Tax (SDLT). Usually, with purchases above £125,000, a percentage of the house purchase price would need to be paid in SDLT.
First time buyers are exempt from paying stamp duty, unless the property is above £300,000. This tax applies whether you are buying a property outright or with a mortgage.
Landlords purchasing on a buy-to-let basis would also need to pay SDLT.
What does the stamp duty holiday mean for buyers?
In his announcement, the Chancellor told us he will be increasing the lower Stamp Duty Land Tax threshold from £125,000 to £500,000. This means any property purchases below £500,000 will not need to pay stamp duty, as long as completion takes place before 31 March 2021.
For properties costing beyond £500,000, the higher rate of Stamp Duty Land Tax applies, but will only be paid for the amount in excess of £500,000, at a rate in line with the total value of the property.
Put into context, this could save thousands, if not tens of thousands of pounds, for home buyers. This means that first time buyers could also opt for a property up to £500,000 without incurring extra charges.
Our no-obligation quote system has been updated to reflect the stamp duty holiday, so you can see updates rates for conveyancing services.
The payment ‘holiday’ means that it will be temporarily cut; you won’t have to pay it back at a later date.
How long will stamp duty holidays last?
Having come into play instantly, this change will run until the end of the 2020/2021 tax year, at the end of March 2021.
For those who have come out of lockdown realising that they need additional space for a growing family, or garden space instead of an apartment, this potentially huge cost saving could be the deciding factor to propel these people into making that move.
What about additional properties?
Landlords extending their portfolios or people looking to buy an additional property can also benefit from this stamp duty holiday, but in a slightly different manner.
Usually, additional property purchases incur SDLT charges on anything beyond £40,000. This increase in the threshold could also mean significant savings, although for second homes, a higher rate of stamp duty beyond the new threshold will apply.
Speak with our team for clear guidance on the new, temporary rates, and what it can mean for extending your property portfolio.
Conveyancing for House Moves
In these current circumstances, it is one thing to find your dream home and have the offer accepted. It is another to have a smooth-running, efficient and trouble-free move.
Conveyancing is the process from having your offer accepted, to getting the keys to your new home, so it is important to find a professional that you trust to manage this for you.
All too often, people will opt for the ‘cheapest option’ when it comes to conveyancing, and sadly this can lead to lengthy and stressful situations, sometimes even with the transaction falling through. It is important to act fast to get the property that you want, and also to ensure that the transaction is completed within this window that exempts buyers from SDLT.
Instruct Trusted Professionals
We hope that with this saving of potentially thousands, buyers will be happy to pay a little extra for a trustworthy conveyancing process which comes highly reviewed, time after time.
Local, expert knowledge pays huge dividends in saving emotional stress as well as time. Read our feedback on Review Solicitors; you won’t be disappointed. We are ranked number one in Manchester for residential property services.
Get a free, no-obligation conveyancing quote here. Our quoting system has been updated to exclude stamp duty tax fees.