It’s no secret that we are in a pandemic. The Government has been updating us quite frequently regarding new procedures and initiatives to help the economy and those who are going through a really hard time.
One of the initiatives that was announced was the Stamp Duty holiday. This was a bid to boost Britains housing market.
What this means is that someone who decided to sell their home and buy a new one would no longer have to pay stamp duty on the new property providing it cost them £500,000 or less.
This initiative doesn’t do much for first time buyers as they haven’t had to pay stamp duty on the first £300,000 of their first property for some time, however, previously they would of had to pay 5% on the excess amount between £300,001 – £500,000.
As soon as this initiative was announced, the housing market picked up massively. The boost most definitely took place!
Home owners used this opportunity to save thousands of pounds.
To give you an idea of how great this initiative is, check out this example:
Someone sells their house for £350,000, moves and buys a house for £400,000 as they want to upsize and have enough equity to do so. In 2019 and even up to 8 July 2020, they would of had to pay £10,000 in stamp duty.
Fast forward to now, this person would pay £0 stamp duty hence the urgency in the housing market.
Many people are trying to move, upsize, downsize and the rest of it before the end of March 2021. April 2021 is the beginning of a new financial year and looking at the deficit the country is currently in due to furlough, bail out funds and the rest of it, we are all going to pay with the potential increase of taxes and the return of stamp duty!
We also have another issue on our hands. Due to the property demand being high, many are prepared to pay a lot more for certain properties in the way of a bidding war…
This is a discussion for next week.