To help get the property market back on its feet post lockdown, the Government has kickstarted a stamp duty holiday which will run until March 31st 2021.
Paying stamp duty acts as a barrier to a number of people purchasing a property, so the Government set up that this move will stimulate more people to do so as the housing market is a vital part of the UK’s economy.
The Government stated the temporary move would mean 9 out of 10 people buying a home during the exemption period won’t need to pay any stamp duty at all.
Here’s we have assembled a list on how the changes which have taken effect immediately and how it may affect you:
Stamp duty does not affect First Time Buyers as they are already exempt up to £300,000. The holiday applies to properties up to £500,000 though so if you are a First Time Buyer in Liverpool buying at that maximum figure, then you would save £10,000 in stamp duty.
Home movers are most likely to be the biggest winners here. If you are moving and your purchase completes before March 31st 2020, then you will not pay Stamp Duty at all as long as the purchase price is <£500,000. The Government predicts that the average stamp duty bill will fall by £4,500, but for properties priced at £500,000 the saving will be £15,000.
The stamp duty surcharge still applies (this got brought in to curb the number of investors buying homes that traditionally would have been bought up by First Time Buyers), but you will still be better off than before.
Under the old system, if you bought an investment property for £250,000, you’d have paid 3% on the first £125,000 and 5% on the second £125,000, resulting in a stamp duty bill of £10,000. During the holiday you will only pay 3% stamp duty on the total purchase price, meaning a bill of £7,500.