BRITS could be set for a “holiday” on stamp duty in a bid by Chancellor Rishi Sunak to boost Britain’s housing market.
The temporary measure would remove tax on the purchase of homes of up to £500,000 to help those most in need following the coronavirus crisis.
Brits could be set for a “holiday” on stamp duty in a bid by Chancellor Rishi Sunak to boost Britain’s housing market
The Chancellor is expected to unveil the new “stamp duty holiday” as part of his economic update – which will be delivered in the House of Commons on Wednesday afternoon.
It will be implemented in the Autumn budget, which will be delivered this coming October.
It comes as property prices are expected to fall due to coronavirus disruption.
But how would a stamp duty holiday work and how long would it last? We explain everything we know so far.
How would a stamp duty holiday work?
Treasury officials are said to be looking at raising the threshold at which homebuyers start paying stamp duty.
Currently they don’t pay any stamp duty on the first £125,000 of homes, then typically 2 per cent of the value of the home up to £250,000 and 5 per cent on the next £675,000.
One source told HOAR the new stamp duty threshold could be set at £300,000 but it may be set as high as £500,000.
That would enable some homes at the lower end of the London housing market to be taken out of stamp duty.
It would also take out hundreds of thousands of properties in the crucial “Blue Wall” seats that handed Boris Johnson his election win last year.
The move would mirror the popular measure introduced by ex-Chancellor Philip Hammond in 2017 when he removed stamp duty for all first-time buyers on homes under £300,000 and £500,000 in London.
The government hasn’t yet officially announced the measures, so we’ll update this article once we get more details on how it’d work.
If you’re not eligible for stamp duty relief, you must send an SDLT return to HMRC and pay the tax within 14 days from the date you completed the purchase of your home.
How long would it last?
First revealed in HOAR, sources say the proposals being looked at are only for a six-month holiday, designed to trigger demand.
But The Times reports that the threshold could be increased for up to a year in a bid to help first-time buyers in a difficult market.
How much money would you save?
The average house cost £248,0000 in England in March this year, according to the Office for National Statistics (ONS).
If you purchased the average house as a first-time buyer, you don’t have to pay any stamp duty thanks to the relief on homes below £300,000.
But home movers would save £2,460 on stamp duty, while Brits buying their second home for the average price tag would save a whopping £9,900.
This assumes that the stamp duty holiday will be apply to second homes as well as first-time buyers.
You can calculate how much stamp duty you have to pay on the Money Advice Service website.
The government also has a handy calculator that tells you much you would pay on a property.
Last week, Boris Johnson announced an affordable housing plan with 30 per cent discounts for first-time buyers.
One in seven Help to Buy homes lose value despite local house prices soaring, research found in June.
We explain what’s next for house prices as first-time buyers fear they will be frozen out of the market.