In his summer statement, Chancellor of the Exchequer Rishi Sunak announced a ‘stamp duty holiday’ in order to help get the UK’s economy moving again. As a result of his announcement, homebuyers will pay no stamp duty on property purchases up to the value of £500,000 until March 2021. The stamp duty holiday applies whether you’re a first-time buyer or someone who is already on the property ladder. Here, we’ll take a look at how you can take advantage of the scheme.
Get your home on the market
The average house sale takes around six months if there’s a chain, so now is the ideal time to get your current home on the market. After all, the stamp duty holiday only applies until March 2021, so the quicker you can get moving, the better.
But, you shouldn’t rush too much to get your home on the market. Look at the estate agents in your area who are performing well and make sure you get a range of valuations. This way, you can make sure you’re selling your home for a fair and reasonable price.
Once you’ve found an estate agent you like and you’re happy with the asking price, take a look at the agent’s online reviews. As these reviews of Purplebricks estate agents show, a good estate agent is worth its weight in gold. After all, they can help you get the best-possible price and sell your home quickly. If you choose poorly, you may struggle to sell your current home and miss the deadline as a result.
Learn the details of the scheme
Once you have a buyer lined up for your current property, you can start to scour the market for your new home. However, you need to make sure you’re buying one that fits within the scheme. Thankfully, the saving will apply to around 90% of all property transactions.
Remember, stamp duty is only paid in England and parts of Northern Ireland, so the changes aren’t applicable to Scottish homes and Welsh homes. Similarly, if you’re looking to buy a second home or a buy-to-let property, you’ll still attract a 3% stamp duty bill on the first £500,000 of property. However, this does still represent a saving when compared with what you would have paid previously.
Discover how much you could save
The more you spend on your new property, the more you’ll save in stamp duty. For example, if you bought a home worth £500,000, you’d save £15,000. Similarly, if you bought a home for £400,000, you’d save £10,000. During the scheme, it’s thought that buyers will save £4,500 on average.
However, sellers are becoming smarter than ever before. As these people know you’re making a saving on the stamp duty, they may drive a harder bargain when it comes to agreeing a price. For this reason, some experts quoted by The Mirror believe that you’ll actually enjoy around half of the saving, while the seller will benefit from the other half by receiving slightly more for their property.
In addition, if you pay more than £500,000 for your property, you’ll still pay some stamp duty as part of the transaction. Although you won’t pay stamp duty on the first £500,000 you pay, the next portion of the property’s price (£500,001 to £925,000) will be taxed at 5%, and the £575,000 after that (£925,001 to £1.5 million) will be taxed at 10%. Any remaining amount over £1.5 million will then be taxed at 12%.
If you’re interested in learning more about how much stamp duty you’ll have to pay on your new property, then you can use the government’s calculator.
So, in summary, if you want to take advantage of the government’s new stamp duty holiday, then now is the time to get moving. As soon as you sell your own property, you’ll be able to find your new home. By moving quickly, you could save thousands.