Zero stamp duty rate is doubled to £250,000 for all home movers and increased to £425,000 for first-time buyers! The recent Government announcement has seen changes to Stamp Duty Land Tax (SDLT). Let us explain what this means for selling and buying a property.
WHAT IS STAMP DUTY LAND TAX?
Stamp duty land tax (SDLT) is charged on the purchase of property or land. It applies in England and Northern Ireland only but there are separate property transaction tax rules in Scotland and Wales.
WHAT ARE THE RECENT CHANGES IN STAMP DUTY?
The recent changes to stamp duty relief will save home movers £2,500 on their purchase as the ‘nil rate threshold’ has increased from £125,000 to £250,000.
The biggest impact will be for first time buyers, with an increase in the ‘nil-rate threshold’ from £300,000 to £425,000. There has also been an increase in the maximum amount first time buyers can buy a house for and still be eligible for relief from £500,000 to £625,000. Be aware if you are a first-time buyer and the purchase price exceeds £625,000 you will be subject to paying the same rates as home movers.
WHY ARE STAMP DUTY CUTS BEING INTRODUCED?
The objective is for the government to support home ownership and promote mobility in the housing market which in turn supports economic growth and spending on durable goods. As the housing market slows down and there is little to no inventory available, the stamp duty relief is an attempt to boost the housing market.
WILL STAMP DUTY TAX INCREASE HOUSE PRICES?
Rishi Sunak, former Chancellor and now Prime Minister, introduced a stamp duty holiday during the Covid -19 pandemic. During these unprecedented times, home buyers reflected on their requirements, leaving cities for the suburbs for additional space to work from home and have access to outdoor space. There was a large surge in demand with a small supply of houses which resulted in property price increases, spurred on with a Stamp Duty holiday to stimulate the property market.
This property ‘bubble’ has not seen much let up since then, but now we are in a different economic climate with the cost of living crisis, increased interest rates and higher borrowing costs, the slow down in the property market remains to be seen.
WILL LOWER STAMP DUTY AFFECT MORTGAGE COSTS?
The savings made on the stamp duty relief will offer an initial saving however mortgage rates are determined by the bank of England base interest rates which have seen a steady increase over the last few months with rumours that the Bank of England will continue to increase the base rate to combat rising inflation costs. This will impact mortgage rates.
WILL STAMP DUTY BE ABOLISHED?
Currently there is no plan for a complete removal of stamp duty on property transactions.
HOW CAN PARKLANE PROPERTIES HELP YOU IN SELLING YOUR PROPERTY?
With 45 years of experience, we know exactly how to sell your property. We start things off with a FREE, no obligation, property appraisal advising you of various marketing strategies catering to your personal situation. You can rest assured your property is in safe hands from instruction through to completion, our highly experience sales team will guide you through the entire sales process, all you have to do is leave everything to us!
Call today on 0113 237 0000 or email email@example.com for more information.