Stamp Duty Holiday Explained
In a bid to revive the struggling housing market amidst the Coronavirus pandemic, the Chancellor, Rishi Sunak has announced some huge news; from now, until 31st March 2021, there will be a stamp duty holiday. Excellent news for those looking to purchase a new home in the next several months!
What is stamp duty?
If you are buying a house in England or Northern Ireland, which costs more than £125,000, (or more than £40,000 for second homes) then you are liable to pay a tax, called stamp duty.
Stamp duty tax applies to all types of properties and anybody buying a property, regardless of whether you are a cash buyer or have a mortgage.
In England and Northern Ireland, buyers pay Stamp Duty Land Tax however, in Scotland and Wales, it differs slightly. The recently announced stamp duty holiday will only apply to buyers in England and Northern Ireland.
What is a stamp duty holiday?
Since Covid-19, the housing market has taken a big hit, so the government is granting a temporary holiday on this property tax in a bid to boost the housing market. This means that anyone buying a property which costs £500,000 or less will not have to pay any stamp duty tax on their purchase if completed before 31 March 2021.
People buying second homes and buy-to-let properties will also benefit, but will still have to pay the 3% extra duty due on the entire price.
Experts have said that this temporary change will encourage more homeowners to move, enabling a further boost to economic activity in other sectors.
How much could you save?
As with anything, the amount that the stamp duty holiday will save you will be personal to your own purchase and circumstances but homebuyers in England can expect to save anything from hundreds of pounds to thousands of pounds.
“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.”
– Chancellor, Rishi Sunak
We would love to help you purchase the house of your dreams and what a better time to start looking! If the Stamp duty holiday has got you thinking about moving, get in touch.