Rishi Sunak confirms stamp duty ‘holiday’ on homes up to £500,000

Rishi Sunak confirms stamp duty ‘holiday’ on homes up to £500,000

Home buyers will not pay stamp duty on homes costing up to £500,000, Chancellor Rishi Sunak confirmed today in a summer statement made to mitigate the economic devastation caused by coronavirus.

The move raises the level at which people in England and Northern Ireland start paying the property tax from £125,000 to £500,000. First-time buyers started paying stamp duty above £300,000.

The new rules will come into effect immediately and will last until March 31 2021, in an attempt to give the housing market a shot in the arm following its seven-week hiatus under coronavirus lockdown.

It is hoped that it will encourage prospective buyers who might otherwise delay a move until next year to buy sooner to take advantage of the tax break.

The stamp duty holiday is part of a raft of measures designed to help younger people, whose finances have been most severely impacted by the pandemic.

Under the previous rules, someone buying a £500,000 property would pay £15,000 stamp duty. With the threshold raised, anyone buying a property for less than half a million will pay no transaction tax, while those buying property above the threshold will save £15,000 on their total tax bill.

With an average purchase price of below £232,000 in the West Midlands, this means most local buyers will not have to pay any stamp duty at all under the Chancellor’s plan, saving £2,140 on the average home.

In London, where house prices are the highest in the country, 57 per cent of buyers will pay no stamp duty under the new rules, with the vast majority of those now exempt in the outer London boroughs.

Homeowners and landlords will also be able to apply for vouchers to make energy-efficient improvements to their properties and are eligible for up to £5,000 per household, potentially saving them thousands of pounds a year on their bills.

If you require any advice around these changes and how they can impact your home move, feel free give our teams teams a call on free phone 0800 862 0860.