Chancellor Rishi Sunak has confirmed the much-rumoured stamp duty holiday, raising the threshold from £125,000 to £500,000 until 31 March next year.
Unveiling today’s mini-Budget, he said the changes would take effect immediately, cutting the average stamp duty bill by £4,500, with 9 out of 10 house buyers paying no stamp duty at all.
The Chancellor claims that this means nine out of 10 main homes sold between now and the end of March, will be exempt from stamp duty.
The aim is to boost the housing market and the wider economy to help the UK recover from the consequences of the coronavirus pandemic.
It comes after the property market was effectively closed between the end of March and mid-May.
Agents and portals have said there has been more demand since the market reopened but it is so far unknown if this will transfer into sales.
Rightmove said there are more than 510,000 properties with asking prices under £500,000 on the portal, making up 81% of all residential stock for sale in England
Mark Hayward, chief executive of NAEA Propertymark, took some of the credit for the changes.
He said: “Following our engagement with the Treasury and Ministry of Housing over the past few months, we welcome the Chancellor’s announcement this afternoon that he will be raising the threshold at which buyers will pay stamp duty to £500,000.
“This a is a welcome commitment by the Government and we are glad that they have listened to our calls to help sustain the property market following lockdown.
“These measures will enable people looking to buy a home to have the confidence and stability to be able to move forward with their purchase, which in turn will have a knock on effect on the wider economy as people buy white goods and furniture.
“The market is moving well at the moment, however once furlough has ceased and the anticipated recession hits, the market might well need further financial impetus, therefore it is right that the sector is given the support and tools it needs to rebound over the next nine months.”
HELP FOR LANDLORDS
The Treasury has confirmed that landlords will also benefit from the temporary stamp duty reforms, From today the 3 per cent stamp duty levy on the purchase of additional dwellings by landlords in England and Northern Ireland will change from covering the first £125,000 of a property to the first £500,000. Thereafter the rates will be 8 per cent on the next £425,000, 13 per cent on the next £575,000 and 15 per cent on the remainder. The measures will be in place until 31 March 2021.