10 Jul The new Stamp Duty holiday and what it means
It’s rare that everyone agrees on something, but one thing that every home owner will attest to is that Stamp Duty is a major budgeting factor when it comes to buying a home and really, no one is entirely sure where it goes or what it is for. It is charged on a tiered scale and in the last 5 years has changed to help first time buyers get onto the property ladder.
So when the Chancellor, Rishi Sunak announced a major cut in stamp duty we have seen a further influx of buyers coming to the market on top of the pent up demand caused by the lockdown. It will mean that 9out of 10 transactions will no longer be subject to stamp duty (national average) and everyone spending over £500,000 will save £15,000.
Boost the Economy
We’ve recently spoken about how busy we’ve been since being allowed to reopen –buyer momentum has been relentless and we expect to see this continue, with people aiming to complete their transaction in time to benefit from the savings.
A move like this has been devised in order to give the economy a shot in the arm with many of those people undecided about their living arrangements recognising the opportunity on offer and springing into action to prepare their property for market.
What does this ‘holiday’ look like?
Sunak’s new measure means that buyers will only start to pay stamp duty on property above £500,000, the threshold was previously £125,000.
This will be for people buying their first home, investors or moving up or down the housing ladder.
The new rates are as follows:
- Up to £500,000: 0%
- On the portion from £500,001 to £925,000: 5%
- On the portion from £925,001 to £1.5m: 10%
- Above £1.5m: 12%
The 3% stamp duty surcharge will apply on top of the new holiday rates, so people buying additional homes will still attract a 3% stamp duty bill on the first £500,000 of property.
|House value (home mover)||Previous Stamp Duty Bill||Revised Stamp Duty Bill||Stamp Duty Saving|
Giving people a tax break on moving home is very likely to encourage those undecided to make their decision to move. This movement will help the property market recover quickly and give the economy a much needed boost as we emerge from the lock down.
While there is an argument to suggest that this tax break is simply moving forward peoples’ plans which would have happened anyway, the impetus to act quickly in order to save significant sums of money on their transaction might actually benefit the wider economy as people redirect those funds to spending elsewhere.
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If you are thinking of moving to the area, make sure you take a look at our amazing catalogue of properties for sale in Virginia Water and the surrounding areas.
If you’d like to speak to someone about properties to let in Virginia Water, a member of our expert team would be happy to help. You can call us on 01344 843000 or email us. You can also follow us on Facebook, Twitter, Instagram and LinkedIn.