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Stamp Duty Holiday: What it means for sellers and buyers Posted On 09 July 2020

Chancellor Rishi Sunak yesterday announced a temporary holiday on stamp duty for property sales in England and Northern Ireland.

 As part of the government’s plans to boost the economy, especially the property market, Sunak yesterday announced a temporary holiday on stamp duty until next March starting from the 8th of July. In reality, what the Chancellor has actually done is increase the stamp duty threshold to £500,000 for property sales in England Northern Ireland.

This means anyone completing on a main residence under £500,000 from now until the 31st March 2021 will not pay any stamp duty, and anyone completing on a property over £500,000 will only be taxed on the amount above £500,000. A move which could save buyers as much as £15,000.

The Chancellor has suggested this could be an average saving of £4,500 with just under nine out of 10 people buying a main residence this year paying no stamp duty at all. Before the announcement, stamp duty was due on any property over £125,000, while first-time buyers didn’t pay stamp duty up to £300,000.

Stamp duty is a lump sum payment for anyone buying a property and is paid upon completion, so from now on, if you’ve exchanged, but not completed you will be eligible for the stamp duty holiday.

This is huge news for the property market affecting all sections. Buyers who were teetering, unsure of whether to make the jump due to financial reasons, will hopefully be tempted by the saving on offer, especially as, for now, it is only in place till the 31st March next year.

With more buyers out there, it is expected that more properties will come to the market. For example, Mr and Mrs X, who already own a home, will now have no stamp duty to pay for an onward purchase up to £500k. With the saving, they come to the market offering a property perfect to a first-time buyer who now has a larger deposit knowing they won’t have to pay stamp duty. Mr and Mrs X have the confidence that their property will get plenty of interest with more buyers out there looking to take advantage of the stamp duty holiday.

First-time buyers, will now no longer have to figure stamp duty into their finances for a move, so will have more money to put towards a deposit, which may, in turn, increase their budget. First-time buyers who were just short of having a deposit may wake up this morning now ready to move.

What do you think about the news? Has it affected you? Let us know today…

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