1st class stamp! Rishi axes duty

9 in 10 home buyers given tax ‘holiday’ to boost market

Stamp duty will be abolished for nine out of ten home buyers until next april as part of a dramatic move to boost the housing market.

Rishi Sunak yesterday announced buyers will pay no stamp duty on the first £500,000 of their purchase for the next nine months.

the measure – effective from July 15 to march 31, 2021 – will reduce the average stamp duty bill for a main home from £4,500 to zero. people buying property worth £500,000 can potentially save up to £15,000.

the Chancellor’s move will also benefit those buying second homes and buy-to-let properties.

Experts said it could encourage ‘missing movers’ back to the market. But it was also suggested some sellers may now be tempted to raise asking prices due to the tax savings buyers will make. and there was concern first-time buyers will still find it hard to get on the property ladder because so few lenders are offering mortgages with deposits of 5 or 10 per cent. the measure temporarily increases the ‘ nil rate’ band of stamp duty from £125,000 to £500,000.

mr Sunak said: ‘Nearly nine out of ten people buying a main home this year will pay no stamp duty at all.’ Stamp duty applies in England and Northern Ireland and people usually pay the tax on homes priced above £125,000. Some stamp duty discounts were already in place for first-time buyers. mr Sunak also said that second home owners and people purchasing buy-to-lets will benefit from a stamp duty tax break.

Up to £500,000, the duty charged will be 3 per cent for second home owners and landlords – it used to be 8 per cent. that works out at a maximum saving of £15,000. Last night there were already signs that the stamp duty holiday is helping to re-boot the property market. In the first 30 minutes after the announcement was made, traffic to property website Rightmove jumped by 22 per cent.

the site’s property expert miles Shipside said: ‘Lockdown prevented 175,000 would-be sellers from coming to market so we hope this stamp duty holiday will provide the spur for those missing movers to come to market.

‘they will find there’s currently record demand for their properties from prospective buyers, with Rightmove inquiries to agents now double what they were before lockdown.’

He added: ‘Home movers will be grateful that the changes come into effect straight away so they don’t have to delay their plans, and what we could see now is people rushing to get a price agreed before some sellers put their prices up in the hope people will be able to pay more because of the tax savings.’

mark Hayward, of the National association of Estate agents’ property-mark, said: ‘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.’

Nick Leeming, of estate agent Jackson-Stops, said: ‘there should be a flurry of fresh buyers entering the market imminently, with the hope of completing their transactions before the tax break comes to an end. Upsizers across the country are set to gain the most from this stamp duty holiday, with savings of nearly £15,000 made available to those purchasing at the top end of this newly-created stamp duty bracket.’

He stressed: ‘this is additional cash for a deposit, allowing these buyers to own more of their property from the start – or indeed make a move sooner than they originally planned.’

‘Record demand for properties’