Last week, it was announced, during the mini budget, there would be an immediate change to the stamp duty levy that is paid for home-buyers in the UK. In this blog, we will talk a little more about what is Stamp Duty, how these changes will affect you and what effects this will have on the UK property market.
Let’s take a look…..
What is Stamp Duty?
First off, let’s explain a little more about what Stamp Duty is.
For those of you who are unsure, Stamp Duty is a levy that is payable as a tax to the Government when you buy a home or land above a certain threshold. Stamp Duty is payable 14 days from the completion on your property transaction in England and Northern Ireland. Stamp Duty Land Tax (SDLT) is often paid via your solicitors but (and some may not know this) you can pay online, by cheque or cash in many banks.
What are the changes?
Previously, (before the announcement last Friday) Stamp Duty would be on a purchase price between £125,001 and £250,000. Following the recent announcement, there is now no Stamp Duty payable on purchases below £250,000.
For first time buyers (FTB), the previous threshold for Stamp Duty was on the first £300,000 however this has now been raised to £425,000. If the property you are buying is priced below £625,000, there will be no Stamp Duty paid on the portion of the property price up to £425,000. Stamp Duty is, however, payable on the amount above this threshold.
How will these changes affect you?
For many, this is seen as a welcome change. With the cost-of-living crisis many are encountering and an increase in interest rates over the last two months affecting mortgage payments this is a saving for anyone looking to but their first home or currently budgeting to move home. On average, home movers could save in the region of £2,500 and for some FTB’s, this saving could amount to £11,000+.
What’s next for the property market?
Over the last 12 months, we have seen an increase in house prices in the UK. For many people considering moving, this increase has caused some concern from an affordability perspective. Coupled with changes to interest rates and cost of living increasing, this Stamp Duty relief will no doubt help the property market in the UK to see more FTB’s stepping on to the property ladder in the coming months.
If you would like to find out more about finding a property or budgeting for the costs of moving, please do not hesitate to reach out to a member of our team.
Sources: Rightmove, BBC News