Chancellor Rishi Sunak has today announced a stamp duty holiday which will run until 31 March 2021 in a bid to boost the struggling housing market which has taken a hit due to the coronavirus pandemic. Although the measure is temporary, it could have a lasting impact on people who are looking to buy homes at the lower end of the market.
When lockdown began in the UK in March, the housing market effectively came to a halt. Estate agents, surveyors and those looking to viewing properties where banned from doing so. During this time, house prices fell by 1.4%, to an average of £216,403 (according to the Nationwide house price index for June).
Stamp duty is a tax paid by people buying properties, although it varies slightly across the UK. As it stands, first-time buyers are already entitled to relief for the first £300,000 of stamp duty. Homebuyers paid stamp duty on properties worth more than £125,000. The rate is then increased 3% on properties worth up to £250,000 and 5% on properties up to £675,000. A stamp duty holiday means that over the coming months, most homebuyers will not have to pay any stamp duty at all. Sunak has stated “the average stamp duty bill will fall by £4,500. And nearly nine out of 10 people buying a main home this year, will pay no stamp duty at all.”
Sunak also stated the reasons for a Stamp Duty holiday for those buying a home for £500,000 or under was “to provide a catalyst to boost confidence in the housing market”. He also added, “I want people feeling confident to buy, sell, move and improve as that will stimulate growth and create jobs.”
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