08 July 2020
The government has today announced a ‘stamp duty holiday’ which, in other words, means they have temporarily risen the stamp duty threshold from £125,000 to £500,000 taking effect immediately and running until 31st March 2021. This means you’ll now have to buy a house for £500,000 or more before you have to pay any stamp duty fees.
What is stamp duty?
In England and Northern Ireland you’re liable to pay Stamp Duty when you buy a residential property, or a piece of land. This tax applies to both freehold and leasehold properties – whether you’re buying outright or with a mortgage.
What does the stamp-duty holiday mean for you?
Unveiling today’s mini-Budget, Chancellor Rishi Sunak said the changes would take effect immediately, cutting the average stamp duty bill by £4,500, with 9 out of 10 house buyers paying no stamp duty at all.
The stamp duty changes will help buyers in London and the South-East the most, with four out of five (79%) first-time buyers in London paying no stamp duty on their purchase, compared with just one quarter (25%) under the previous £300,000 threshold for first-time buyers.
The average house price in West Sussex currently stands at £361,110 according to property giant, Zoopla; which means a saving of £8,055.50 in stamp duty for a property at that price.
People buying second homes and buy-to-let properties will also benefit, but will still have to to pay the 3% extra duty due on the entire price.
What does this mean for the housing market?
There’s no doubt that the stamp duty holiday will enable many people, who were perhaps worried about affording the fees associated with moving house, to now do so. It also acknowledges that it’s not just first-time buyers who need help when it comes to moving house, as previously, first time buyers were the only buyers who had exemption rights before the announcement.
How do I know what I can afford now?
The stamp duty relief is great news for affordability, but we’d always advice seeking professional advice before beginning to look at more expensive properties. Our trusted partners, Mark Coleman & Mark Lyness of Mortgage Advice Bureau, are on hand to provide independent financial advice to anyone who may benefit.