The Chancellor has today announced a temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland. This Stamp Duty ‘holiday’ is effective immediately until 31st March 2021 and could represent a saving of almost £15,000 for a property bought for £500,000.
This news is a welcome release aimed at helping buyers and sellers as we move through the effects of Covid-19.
What has changed?
Before this Stamp Duty holiday, rates were incremental dependant on the value of the property: 2% on the portion between £125,001-£250,000, 5% on the portion between £250,001-£925,000, 10% on the portion between £925,001-£1.5m, and 12% on any portion above £1.5m.
However, first-time buyers paid no tax up to £300,000 but had to pay a stamp duty of 5% on the portion between £300,000 and £500,000 and so on, as detailed above.
In addition to this, landlords pay an extra 3% of stamp duty when they purchase a buy-to-let property in England and Northern Ireland and different rates apply for second and subsequent homes.
Though finer details are yet to emerge, we understand that properties over £500,000 will be subject to the usual stamp duty rates as described above, meaning 5% on the portion between £500,001 to £925,000, 10% on £925,001-£1.5m, and 12% on any value above £1.5m. We await the Government’s clarification on this.
So what does this mean for buyers in our local areas?
Here we take a look at the overall average house prices in the key counties that GTH covers and what savings buyers could enjoy.
In Somerset, the overall average house price is currently £303,276*, meaning that with the stamp duty holiday, a buyer would save £5,163.
In Devon, the overall average house price is currently £268,741* meaning that with the stamp duty holiday, a buyer would save £3,437.
In Dorset, the overall average house price is currently £330,894* meaning that with the stamp duty holiday, a buyer would save £6,544.
These savings would apply as long as the transaction is completed before the 31st March 2021 and would vary for first time buyers.
Simon Havens, Partner and Head of Residential Sales at GTH, says: “This can only be great news for the property market in the West Country. Buyers could make a potential saving of almost £15,000 in some cases and any saving when moving home is always welcome. This move by the Government bodes well for buyers and sellers alike and should help to sustain the existing buoyancy of the market we are experiencing post-lockdown. We are continuing to see high demand, especially from purchasers outside of our area who are looking to relocate from other parts of the country.”
If you have further questions about how this affects your current or future move, we would be delighted to help. Contact your local GTH office via www.gth.net/contact
For further details on the Stamp Duty changes please visit the Government's own website: gov.uk/stampduty
* Source: Rightmove