You may have heard the term ‘Stamp Duty’ used quite a lot lately. If you’re a first time buyer or thinking of buying soon, you might not even know what Stamp Duty is! The team at Houso would like to give you a simple rundown of what Stamp Duty Land Tax is, and how the second half of 2020 is an amazing period for first-time buyers to save a lot of money.
Last week, Chancellor Rishi Sunak, announced a temporary ‘holiday’ (a break) on Stamp Duty, until March 31st, 2021. The government recognised that many potential home buyers and the property market have been impacted by the Coronavirus pandemic. This tax ‘holiday’ is fantastic news for potential homebuyers in England and Northern Ireland. Unfortunately, this will not apply to those of you planning to purchase property or land in Scotland and Wales, although there are updates coming on this in due course we are lead to believe.
So, what exactly is Stamp Duty anyway? Stamp Duty is a one-off payment for those buying any property or land over a certain cost threshold (£125,000 of old). The amount varies depending on the property/land price and property-type, and the sort of purchaser you are, i.e a second home owner or investor pays a different level to a primary home owner. The general rule is: Stamp Duty increases as property worth increases. The threshold is now at £500,000 for properties in England and Northern Ireland, this means that if you are buying a property under £500,000 between now and 31st March 2021, you do not have to pay Stamp Duty. This is also applicable to second homes or investors, there is still the 3% additional levy payable for a second home, but the first £500,000 is exempt so there could be significant savings for BTL investors.
So, even if you are buying a £500,000+ property, you can still save as much as £15,000. Chancellor Rishi Sunak predicts that the average Stamp Duty bill will drop by £4,500, with nearly 90% of people buying a home this year paying no Stamp Duty at all. According to Halifax, property prices have dropped for 4 months in a row and now taxes have dropped too! With lowered property prices and an extension to the government’s ‘Help to Buy’ scheme now is a great time to purchase your new home.
Download Houso to browse the housing market in your local area and start compiling a list of your favourite homes! With Houso you can house hunt as stress-free and enjoyably as possible. We offer an entirely new approach to finding your perfect new home. Houso unlocks doors to homes you wouldn’t find elsewhere and gives you the chance to contact sellers and estate agents directly through the app.