BRITS are set for a six-month stamp duty holiday as the government aims to kick-start the economy following the coronavirus lockdown.
The measure is being discussed by the Treasury and could be revealed by chancellor Rishi Sunak during his mini-Budget announcement today (July 8) in a bid to stimulate the housing market.
When is Rishi Sunak’s stamp duty announcement?
A “stamp duty holiday” is understood to be a policy being considered by Mr Sunak from today (July 8) – not the Autumn as previously thought.
He is set to unveil the plan as part of his economic update, which will be delivered in the House of Commons today (Wednesday, July 8). The announcement is expected to be around 1pm.
It is expected the Chancellor will raise the tax-free property threshold as high as £500,000, meaning most homebuyers won’t have to pay any stamp duty.
HOAR revealed on July 4 that ministers were considering a six-month stamp duty holiday to revive the housing market.
The new move would mirror the popular measure introduced by ex-chancellor Philip Hammond in 2017 when he removed stamp duty up to £30,000 for first-time buyers buying properties worth up to £500,000.
The following year he announced that first-time shared ownership buyers can claim relief if their house was bought after November 22, 2017 for no more than £500,000.
What is stamp duty?
Stamp duty land tax (SDLT) is a lump sum payment anyone buying a property or land over a certain price has to pay.
All house buyers in England and Northern Ireland must pay stamp duty on properties over £125,000 – although there are some exceptions.
For example, first-time buyers in England or Northern Ireland pay no stamp duty on properties worth up to £300,000.
The rate a buyer has to fork out varies depending on the price and type of property.
Rates are different depending on whether it is residential, a second home or buy-to-let.
Currently, homebuyers pay 2 per cent of the value of the home between £125,001 and £250,000, and 5 per cent on the next £675,000.
It comes as new figures show a sharp drop in house prices for the second month running in June, with the average value of a home down by 1.4 per cent, according to lender Nationwide.
Have there been stamp duty holidays before?
Yes, the government has previously introduced a stamp duty holiday for Brits on two occasions.
In December 1991, Conservative chancellor Norman Lamont announced that the threshold for stamp duty would be raised from £30,000 to £250,000 for eight months.
The move was seen as a way to counter a slump in the housing market during the recession, and saw the number of home sales double, Homes and Property reports.
And at the height of the financial crisis in 2008, the former Labour chancellor Alistair Darling suspended stamp duty for a year on properties costing less than £175,000.
The move was welcomed by homeowners amid the significant economic downturn.
What is Rishi Sunak expected to announce?
The Chancellor is expected to introduce a range of policies in his mini Budget this week, as the Treasury seeks to restart the economy after months of coronavirus lockdown.
Another possible measure being considered is removing stamp duty land tax (SDLT) on vacant land.
The move is designed to take advantage of disused land to boost the development of new house-building projects.
Other measures being discussed include a cut on VAT for pubs and restaurants to help protect jobs in the hard-hit hospitality industry.
Plans are also being discussed for new apprenticeship schemes, whereby companies could be given £1,000 to take on trainees.
The Treasury is also expected to invest £100million in traineeships for young people.
And about 270,000 more young people will benefit from jobs advice through a £32million investment in the National Careers Service.
The government has also announced a £1.6billion package for the arts industry, which will help to save theatres and live music venues which remain closed to curb the spread of the virus.
Restaurants, pubs and cafes reopened on July 4 as part of “Super Saturday”.
But there are fears that, without drastic intervention, many jobs could be lost in the coming months with the Chancellor aiming to stop young people bearing the brunt of lockdown.