NO STAMP DUTY ‘FOR 90%’

NIL RATE TAX BAND RISES IMMEDIATELY FROM £125,000 TO £500,000, AIMING TO TEMPT ‘MISSING MOVERS’

A STAMP duty holiday on homes worth up to £500,000 will cancel the tax for 90 per cent of buyers, said Rishi Sunak.

In a bid to get the property market moving again, the chancellor announced the ‘nil rate’ band of stamp duty will be temporarily increased from £125,000 to £500,000 – saving buyers up to £15,000.

‘Nearly nine out of 10 people buying a main home this year will pay no stamp duty at all,’ said Mr Sunak.

The tax applies in England and Northern Ireland and people usually pay it on homes priced above £125,000, or over £300,000 for first-time buyers. But from July 15 until March 31 2021, buyers will pay no stamp duty on the first £500,000.

The move reduces the average stamp duty bill for a main home from £4,500 to zero. For £500,000-plus properties the stamp duty bands are unchanged – charging five per cent per £100,000 above the threshold.

In the first half hour after the announcement yesterday traffic to property website Rightmove rose 22 per cent. On Tuesday, as speculation mounted about the plan, the site had a record 7.7million visits.

Rightmove 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.

‘Home movers will be grateful that the changes come into effect straight away... 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.’

But Will Scoular, of Investec, said the removal of the support could stall the market, only delaying the impact of the pandemic. Meanwhile, unchanged rates for pricier homes would slow down sales, reducing the overall tax take.