Given everything that is going on in the world right now, you would be forgiven for not staying up to date with changes in the housing market, and to stamp duty in particular. However, if you are looking to buy a home now or soon, it is imperative you are up to date with stamp duty regulations, because you must make an informed decision.
Stamp duty holiday changes regulations changed on July 1st
As of July 1st 2021, the 0% stamp duty for property purchases in England is now set at £250,000 for people purchasing their first home. For households purchasing their second home, or a buy-to-let property, there will be an additional 3% rate on properties up to £250,000.
This change is part of the rolling back of measures introduced in July 2020 to support the property market amidst the pandemic. From July 2020 to July 20201, stamp duty was removed from property purchases up to £500,000.
This stamp duty holiday was scheduled to end on March 31st 2021, but was extended to this recent change being the 1st July 2021.
Can I still save when buying a home now?
If you are a first time buyer, there are savings to be made on the stamp duty due.
With the average price of property being stated as £336,073; at this price, there is still an opportunity for buyers to save when buying a home now or soon.
Without a stamp duty holiday, a property purchase of this scale would see a stamp duty fee of £6,804 being charged to the buyer. Right now, with the reduced stamp duty holiday in effect, the stamp duty payment is £4,304. This means buyers can save around £2,500 on the average cost of property. While this isn’t the magntitude of saving some buyers have experienced, any opportunity to lower the cost of buying a home is welcome.
Miles Robinson, head of mortgages at Trussle, said: “Without doubt, the Stamp Duty Holiday has been the driving force behind the property market over the past year. During a time when many expected property transactions to tumble, as households tightened up their finances, it provided a huge incentive for people to move home rather than stay put. As a result, we have seen record levels of demand across the supply chain which has driven strong price growth throughout the year.”
Miles Robinson added; “Now, as the ‘full’ Stamp Duty Holiday ends, many might think that there are no savings to be made. But, it’s important to remember that there is a reduced rate of Stamp Duty in place until 30 September. For those that still want to move home and can move quickly, not paying Stamp Duty on the first £250,000 can still mean big savings.”
Are there further stamp duty changes to come?
Yes. The next change is scheduled to take place on October 1st 2021, and the impact it has on you will depend on whether you are a first-time buyer, someone looking to buy a main residence, a current homeowner, someone looking to buy an additional home, or someone investing in a buy-to-let property.
- If you are a first-time buyer, the 0% stamp duty band is available for purchases up to a value of £300,000.
- If you are buying a main residence but you are not a first-time buyer, the 0% band is available for purchases up to £125,000.
- Anyone looking to buy a second property or a buy-to-let home only enjoys the 0% band up to £40,000.
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DISCLAIMER: These articles are for information only and should not be construed as advice. You should always seek advice prior to taking any action.