Recently, the Chancellor of the Exchequer Rishi Sunak delivered a ground-breaking UK Budget in the midst of the COVID-19 pandemic. Welcome to our four-part series setting out what this Budget could mean for you when it comes to your properties and investments.
Welcome to the first part of our four-part series covering what the Budget could mean for you when it comes to your properties and investments.
Stamp Duty Holiday Extension
The Stamp duty holiday was put in place in July 2020 and has led to a surge in properties being exchanged. Zoopla states that at least 740,000 buyers will have benefited from the stamp duty cut by the time it ends. HMRC has provisional figures which show that 129,400 transactions went through in the UK in December – compared to 87,040 in 2019 and 83,880 in 2018. Data from Rightmove shows that the average number of days it took to sell a property fell to just 49 in November, compared to 67 a year earlier.
What is the Stamp Duty Holiday?
The Stamp duty Holiday has meant that homebuyers in England and Northern Ireland don’t have to pay any tax on the first £500,000 of their property price. It was due to end on 31st March but has been extended in this Budget.
The new timeline:
• 0% stamp duty on the first £500,000 of property purchases until 30 June.
• 0% stamp duty on the first £250,000 until 31st September.
• 0% stamp duty level on the first £125,000 (the normal rate) from 1st October
What this means for Landlords:
Many buyers were rushing to complete their transactions before the holiday ended in March as planned. However, now there are real fears that house prices are surging due to the number of buyers taking advantage of this extension.
Property investors stand to benefit from this scheme as it is open to all buyers including first-time buyers and buy-to-let buyers. If you were to buy a £500,000 property in England or Northern Ireland, you could still save up to £15,000 on stamp duty if you complete before 30 June. Even if you miss this new deadline, you can still save money due to the tapering period up to the end of September. Based on the UK average house price of around £250,000, this could allow you to buy a home with a deposit of £12,500.