Rishi Sunak has today announced a stamp duty holiday extension in the government’s spending plan. The stamp duty holiday was originally introduced to boost the property market during lockdown. It could save buyers as much as £15,000, if they were buying a property of £500,000 or more. Since the discount was introduced it has cost the Treasury an estimated 3.8 billion in revenue. This equates to about 2% of the government’s total tax take. The announcement has been well received by homeowners looking to move house or those looking to get on the property ladder.
When you purchase a property or land, you usually pay tax on it. Last summer in response to the pandemic, the government temporarily increased the amount at which stamp duty is paid to £500,000. This applied to property sales in both England and Northern Ireland.
The tax-break was due to end on 31st March, however Mr Sunak announced an extension to the 30th June. This means that anyone who purchases a property that completes by June 30, 2021 won’t have to pay tax on the first £500,000. Rishi Sunak informed MPs: “I can announce today the £500,000 nil rate band will not end on March 31. It will now end on June 30. Then, to smooth the transition back to normal, the nil rate band will be £250,000, double its standard level, until the end of September. And we will only return to the usual level of £125,000 from October 1.”
Rishi Sunak also announced a “mortgage guarantee”, telling MPs: “Lenders who provide mortgages to homebuyers who can only afford a 5% deposit will benefit from a Government guarantee on those mortgages.’ ‘I’m pleased to say that several of the country’s largest lenders including Lloyds, NatWest, Santander, Barclays and HSBC will be offering these 95% mortgages from next month, and I know more, including Virgin Money will follow shortly after. “A policy that gives people who can’t afford a big deposit the chance to buy their own home. As the Prime Minister has said, we want to turn generation rent into generation buy.”
While the announcement has been widely well-received by homeowners, Labour leader Kier Starmer has stated there should have been plans announced for a “generation of genuinely affordable council housing”. He argued the government’s mortgage guarantee would drive up home prices for first-time buyers.
If you’re looking to take advantage of the stamp duty holiday extension, we can help. Having a survey done can help save you even more money down the line. RICS estimate that homeowners that do not get a survey can face costs of up to £5,750 in repair bills due to hidden defects. If you would like to find out more, please contact us on 0151 321 2000 or get in touch here. We’re always happy to help!
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