BLOG - Stamp Duty abolished for homes worth up to £500,000 with Immediate Effect

BLOG - Stamp Duty abolished for homes worth up to £500,000 with Immediate Effect

Many of us have been waiting for this announcement for some time and in his statement yesterday, Chancellor of the Exchequer, Rishi Sunak, announced the temporary abolishment of stamp duty on houses worth up to £500,000. This momentous change is designed to boost the economy in general and will keep the new cut in place until March 2021.

There had been rumours his announcement was coming, with many in the industry worried that Sunak may announce the measures but then hold off implementing them for a number of months. Thankfully, this isn’t the case and the new measures come into effect immediately, as of July 8th.

Lower Stamp Duty Threshold Increased

As of this moment the government has increased the lower stamp duty threshold for property sales in both England and Northern Ireland. This threshold is now £500,000 and means any property purchased below this amount will not need to pay stamp duty, provided the deal is complete by March 2021.

The change should stimulate the market and benefit buyers who have taken a financial hit due to the global COVID-19 pandemic. House prices have been falling on average around the UK and the Chancellor asserts that the cut in stamp duty will see the average stamp duty bill fall by £4,500.

While most in industry are pleased to see the quick and immediate action, some do have concerns. Those worried think that the immediate nature of the action will see people planning a future move accelerating their plans, therefore leading to a future slump once the holiday period is over. We cannot know whether this will be the case, but it is understandable that those looking to move home will want to take advantage of the scheme and the benefits of not having to pay an additional tax.

Before the latest announcement stamp duty was payable on all property sales above £125,000. As well as boosting the property sector directly, the Chancellor also hopes there will be a knock-on effect in related service areas including repairs and maintenance companies, building firms and retailers selling furniture and furnishings.

Surge in Property Sales Predicted

With the chance to make a saving on buying a new property, many will be encouraged into their next big move, fantastic for the market and for people looking for their new dream home. Experts do believe that Sunak’s announcement and immediate change in policy will cause a flurry of action on the market and give it a much-needed boost as we head towards a post-Pandemic world.

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