Stamp Duty Holiday: What does it mean for your move?
In the latest announcements from the Government, to offset the effects of Coronavirus, Rishi Sunak, Chancellor of the Exchequer, announced on the 8th of July that home movers will be able to take advantage of a Stamp Duty holiday until March 2021.
Whilst this may seem like a good chunk of time, did you know that on average it takes 6-7 months to complete a house purchase?
Now is the time to take advantage of this opportunity, and save thousands of pounds.
What exactly does this mean?
With the threshold on Stamp Duty being raised to homes under £500,000, there’s the real possibility of being able to save up to £15,000 in tax off your purchase. This is effective across England and Northern Ireland until the 31st March 2021.
Note: New rates apply to residential properties bought 8th July 2020 - 31st March 2021 in England and Northern Ireland - Source HMRC
What is Stamp Duty?
If you haven’t moved home in a long time, it’s easy to forget about all the processes and payments involved with such a big transaction.
Stamp Duty is effectively the lump-sum tax that you have to pay when buying a property.
The rate you pay works on a scale and depends on the price of the property, and also if it is residential or commercial.
What does this mean for your move?
The Stamp Duty holiday means that you’re guaranteed to save money on your next move, if you complete on your move before March next year. With the average home purchase price in England and Northern Ireland sitting at around £248,000, most buyers will be seeing a saving of around £2460. However if you purchase a property at the half a million mark, that’s when you’ll see the maximum saving of £15,000.
Find out how much you could save with the HMRC Calculator.
With Savills reporting that 90% of all homes in England and Northern Ireland are purchased below £500,000, 9 in 10 people who secure a property during this time will benefit from the tax holiday.
The Stamp Duty holiday will enable buyers to add a little extra to their budget, pop the money into a savings pot, or make it easier to move, spending the money on removals and decorators. Are you already daydreaming what you might be able to use the money for? The Government is expecting to see increased spending in the home interiors industry, as many people will be able to make those extra splurges, that they might not have been able to before.
Rightmove reported a surge of activity when the Government announced the Stamp Duty holiday.
Buyers have all the cards at the moment, and with 510,000 properties available on Rightmove, under the £500,000 threshold, the available properties are vast and varied.
The Stamp Duty holiday move has been put in place in order to help buyers who have had their moving plans stalled by the Coronavirus outbreak and the shut down of the property market.
Now is the time to seize the opportunity if you’ve been looking to move, and beat the competition.
“This move will help to keep the nation and wider economy moving because keeping the current momentum going will help prevent destabilising falls in property prices as unemployment grows, and enable a quicker economic recovery. Lockdown prevented 175,000 would-be sellers from coming to market so we hope this Stamp Duty holiday will provide the spur for those missing movers to come to market. They will find there’s currently record demand for their properties from prospective buyers, with Rightmove enquiries to agents now double what they were before lockdown” - Miles Shipside, Rightmove
What if I’m not yet on the market?
If you’re not yet on the market, even if you found the perfect property and your offer was accepted today, you can expect you’ll be about 6-7 months away from exchanging on a property, permitting that most parts of the transaction run smoothly. With over 40 years worth of experience, we know that this means there is no time to waste! To benefit from the Stamp Duty holiday you should be preparing your property for sale and getting on the market right away.
What if I’m already on the market?
If you’re on the market but haven’t completed a sale, this means that the tax holiday will still apply to you, and you can look forward to making that extra saving if you complete before March 31st 2021.
Be sure you’re not making common selling mistakes however, as it can leave your property stagnating amongst the competition. If you’re still looking for a property, the new savings might help you increase your budget, and could help expand your property search!
Unsure on your budget? Read our quick guide to working out your affordability, plus if you're over 60, why not try our quick and easy calculator? Within minutes you could find out how much you could save on the cost of your next home, with help from Homewise.
With people flooding to the online property search portals, the saving could also allow you to reduce the sale price of your property. This will allow you to get a quicker sale and beat the competition ahead of the rush.
What if I am nearly ready to exchange and complete?
The Stamp Duty holiday applies from the 8th July 2020 so, if you've not completed yet you will benefit from the new saving!
Anyone who completed on a property purchase before this date would have had to pay the original Stamp Duty rates. But, as Stamp Duty is payable upon completion, if you have exchanged contracts and are currently waiting on completion, you will still be able to benefit from the change.
Don’t miss out: make sure you benefit from the Stamp Duty holiday
Get on the market as soon as possible! With the added saving you could:
- Achieve you moving goals quicker
- Increase your budget for the perfect property, expanding your search
- Reduce your house price and make for a quicker sale
- Put the money towards savings, holidays, inheritance and home improvements - the choice really is yours!
The Stamp Duty holiday is a great opportunity to seize in the wake of the Coronavirus pandemic to move into the home that you’ve always wanted. Not only is it a positive move for the economy and the property market, but it’s making those dreams of moving closer to friends and family, a better location, or having a bigger garden, an achievable reality.
If you’ve been thinking about moving home, and aren’t sure where to start, it’s important that you move quickly. Get in touch with our friendly team and discover how we could help you. Call 0800 043 4488 today.
In the meantime, you can use our online calculator! It's simple, quick and could provide you with a better understanding of your potential budget.