Rishi Sunak’s budget announcement of 8th July 2020 regarding Stamp Duty was a welcome boost for the property and conveyancing world.
Statistics had shown that the property market had taken a downward spiral over the last few months due to the uncertainty that people suffered in relation to finances and job security due to COVID-19. Since the lifting of restrictions, as a department, we have noted a steady rise in instructions levels. Given Rishi Sunak’s announcement of yesterday that no Stamp Duty would be payable for properties being brought under the value of £500,000.00 until March 2021, an influx of instructions is expected across the board giving the economy a much needed boost.
Under usual circumstances, First Time Buyers benefitted from Stamp Duty relief in that their purchases of a main residence were not subject to payment of Stamp Duty unless purchasing for a value of over £300,000.00. For those who were not First Time Buyers of a main residence, they were liable for Stamp Duty for any purchases over the sum of £125,000.00. Any additional properties, for example buy to lets, were subject to a higher rate of Stamp Duty which potentially deterred many from purchasing second properties.
As of 8th July 2020, the starting threshold for Stamp Duty will be increased to £500,000.00 for all those purchasing their main homes, not just First Time Buyers. The starting rate for any purchases above £500,000.00 will be 5%, and will be applicable to part of the sale up to £925,000.00.
The £500,000.00 threshold will also be applicable to second homes and additional properties but will attract a 3% surcharge. Therefore, buying a property will also be cheaper for landlords.
The Stamp Duty savings will allow people to move quicker than perhaps planned, as they will no longer need to save as much and can channel the Stamp Duty saving towards the deposit for the purchase property.