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Stamp Duty Holiday: what does it mean for the property market?

Wed 8 July 2020

Today, Chancellor Rishi Sunak announced a raft of measures in a mini budget focused on economic recovery due to the coronavirus pandemic.

Amongst the announcements surrounding job retention and support for the hospitality and leisure sector, was an anticipated temporary change to the Stamp Duty threshold.

Previously, buyers did not have to pay stamp duty on property up to £125k, as of today, this has been increased to £500k until 31st March 2021.

Commenting on the news, Robbie Hutchinson, Managing Director at youngsRPS said: “The news of a Stamp Duty Holiday until 31st March 2021 is largely welcomed by the industry, particularly as the measures have taken effect immediately, rather than in August as rumoured - the latter would have significantly disrupted the market. Activity in the market has most certainly resumed in comparison to March and April we have experienced increased activity which has surpassed anything seen in the last 12 months. One issue that the industry has been facing for past couple of years is stock to demand ratios. I hope that the announcement will give those looking to enter the market a measure of confidence over a difficult period and help towards creating an overall more stable marketplace.”

It is important to note that this measure does not remove the premium to those buying additional homes, for example a holiday home or buy-to-let accommodation. Please see below all revised rates as of 8th July 2020.

Source: https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates

Residential Rates

These rates apply whether you are buying your first home or have owned property before.

Property or lease premium or transfer value

SDLT rate

Up to £500,000

Zero

The next £425,000 (the portion from £500,001 to £925,000)

5%

The next £575,000 (the portion from £925,001 to £1.5 million)

10%

The remaining amount (the portion above £1.5 million)

12%


Higher rates for additional properties

The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.

Property or lease premium or transfer value

SDLT rate

Up to £500,000

3%

The next £425,000 (the portion from £500,001 to £925,000)

8%

The next £575,000 (the portion from £925,001 to £1.5 million)

13%

The remaining amount (the portion above £1.5 million)

15%

 

Robbie continued: "some of the other job retention and creation measures announced today may also help provide some stability to the housing market in what is likely to be a bumpy six months for the economy and jobs.

As always, with any temporary stamp duty changes, the market will be disrupted when the relief is removed at the end of March 2021, potentially creating a surge in demand in March and then a quieter property market in the following months however, it will certainly help ensure that the market continues to move forward over the coming months.”

To speak to your local residential expert in relation your property needs, please contact:

Alnwick
Hexham
Sedgefield
Northallerton

Stamp Duty Calculator: click here