He announced that stamp duty has been abolished on homes under £500,000 until March 31st 2021, meaning savings of thousands of pounds for many when they purchase a new home.
The Chancellor announced the abolition and said the aim in doing so was to get the housing market going again and to help boost the economy after a tough economic period during the Coronavirus pandemic. This announcement means that around 90% of home buyers will save thousands of pounds when they purchase a new, ‘main’ property, as if the property is under £500,000 they will pay no stamp duty at all.
The complete abolition of Stamp Duty Land Tax for homes under £500,000 doesn’t apply to those who purchase second homes, as the aim is to make it easier for first time buyers to be able to buy homes that are as affordable as possible. These rates apply whether people are buying their first home, or if they have owned property previously, although will not apply on the purchase of a second home.
In addition to the abolition of Stamp Duty Land Tax, the government will also be offering vouchers of up to £5,000 for homeowners who make energy-efficiency improvements within their homes. This is in a bid to make homes greener and more energy efficient for the future.
When individuals make a purchase on a residential property between 8th July 2020 and 31st March 2021 that is over £500,000, they will only pay Stamp Duty Land Tax on the amount over £500,000. The amount payable from £500,001 to £925,000 will be 5%, on £925,001 to £1.5 million will be 10% and anything over £1.5 million will be 12%.
New rates for those purchasing main homes, effective until March 31st 2021:
· £0-£500,000 0%
· £500,001-£925,000 5%
· £925,001-£1.5 million 10%
· £1.5 million + 12%
In addition to the Stamp Duty Land Tax changes for those purchasing main homes, the Government also announced higher rates for those purchasing additional properties. They announced a 3% higher rate for purchases of additional dwellings on top of revised standard rates which will apply for the period from 8th July 2020 to 31st March 2021.
On the back of this announcement, The Optimal Group is currently in the market looking for new opportunities to get started on and our Optimal Development Group are currently working on some exciting new projects. At present, our team is also working to sell some of our current stock and our Optimal Management Group have taken on several new properties to our portfolio as some landlords have completed their purchases after things were stalled during the lockdown.