Many believe that now with the added pressure of Christmas and the ongoing uncertainty with the coronavirus pandemic, trying to catch the stamp duty relief before it ends is now near to impossible. At Q we have some advice to offer for people who are either on the market or contemplating putting their property up, with a highly trained sales team and a great track record for delivering quicker than average sales we believe that to be in a comfortable sale being under offer before 31st of January is essential.
As of July 8th 2020, Chancellor Rishi Sunak has implemented a national relief on the Stamp Duty Tax lasting until the 31st of March 2021. The removal of the tax has been proposed as a kickstart to the stalled housing market during the coronavirus pandemic. Although the measure is temporary it has had a huge impact on the property market.
Stamp duty must be paid when an individual purchases a piece of property or land for a sum of money. The amount of stamp duty is calculated upon the overall price of the property. The previous thresholds for stamp duty stood at £125,000 for residential properties and £150,000 for non-residential land and properties as it now stands the threshold is set at £500,000 but will be reverting back to the initial figures at the set end date of the tax relief.
There is a realm of information out there and finding out the key information can be difficult sometimes, below we have summarised and bullet pointed some information we think is key to understanding the Stamp Duty Relief
- The relief will apply to anyone who purchases a property between the 8th of July until the 31st of March.
- A non-first rime buyer on average will be saving £2,500 (based on the average English house price as of January 2020) as a result of the increased threshold.
- The starting rate above £500,000 will be 5% and will apply to the part of the sale up to £925,000.
- For people buying a second homes and additional properties the 3% surcharge will still be in place but buying property as a landlord will be cheaper.
- If you are a first-time buyer spending £495,000 on a home, you will not pay any tax now and stand to save £9,750; a mover spending the same sum would save £14,750. At £600,000, you will pay 5% on the portion above £500,000. Your bill will be £5,000 – £15,000 less than under the old rules.
- An investor spending £250,000 on a property will save £2,500, while one spending £495,000 will save £14,750.
Although there is growing pressure from the industry for the stamp duty holiday to be extended the government are yet to support or dismiss this. Some key points for wanting the extension
- Worry that the failure to complete transactions by 31st of March ‘’could see the breakdown of chains with consumers potentially financially unable to continue with the purchase, as they would have to find funds to pay the stamp duty’’- Letter to Rishi Sunak by Propertymark
- Help to stimulate the housing market throughout 2021 ‘’We will be up against tough economic conditions. Further stamp duty measures could also help to avoid a sharp drop-off of property supply and demand in April.’’ Bryan Mansell
It has been agreed that an extension or gradual tapering off of the stamp duty holiday would be beneficial to help ensure the pressure on property professionals is reduced and can help the backlog of transactions built up in recent months.
If you are interested in beating the stamp duty holiday why not book a valuation with us, feel free to either call or fill in the valuation tool on our website.