Chancellor of the Exchequer Rishi Sunak yesterday announced a major change to Stamp Duty in England and Northern Ireland to help recover the property market and economy from the effects of lockdown.
In his ‘mini-budget’, he said there will be no stamp duty to pay on property purchases up to £500,000 on purchases between 8 July 2020 and 31 March 2021. This applies to first-time buyers and to existing homeowners. There remain higher rates for people buying a second home, or increasing their property portfolio,
Revised owner-occupier rates
| Property or lease premium or transfer value |
SDLT rate |
| Up to £500,000 |
Zero |
| next £425,000 (the portion from £500,001 to £925,000) |
5% |
| next £575,000 (the portion from £925,001 to £1.5 million) |
10% |
| remaining amount (the portion above £1.5 million) |
12% |
Revised rates for additional properties
| Property or lease premium or transfer value |
SDLT rate |
| Up to £500,000 |
3% |
| next £425,000 (the portion from £500,001 to £925,000) |
8% |
| next £575,000 (the portion from £925,001 to £1.5 million) |
13% |
| remaining amount (the portion above £1.5 million) |
15% |
The housebuilding industry has been very positive about the announcement. Here are a few comments from them.
Ian Menham, West regional director, WhatHouse? Housebuilder of the Year 2019, Barratt Developments Plc: “The stamp duty cut will be welcomed by many of our customers and will give an immediate boost to the whole housing market.”
Mark Booth, managing drector of WhatHouse? Small Housebuilder of the Year Hayfield: “This will be a big financial help to lots of people who are looking to move onto or up the property ladder. The Covid-19 lockdown saw families spend more time at home than ever before. Moving to a beautiful new home with modern living space, purpose-designed work space and easy access to the great outdoors will now be within the affordability of more buyers.”
Tom Nicholson, chief operating officer at Crest Nicholson: “The stamp duty break, Green Homes Grant scheme, and incentives for companies to bring back furloughed employees and get young people into the industry, will be crucial to increasing affordability for many buyers, and helping the industry and economy recover.”
Lynne Smith, sales and marketing director at Fernham Homes: “Saving for a deposit and then stamp duty costs are the biggest barriers for people getting on to the property ladder and this will aid so many people’s plans to buying their own home.”
Dean Markall, sales and marketing director at Martin Grant Homes: “A period of stamp duty exemption will have a positive ripple effect throughout the industry, and house sales will be boosted. Homeowners will be encouraged to move as there will be no additional tax to pay.”
Jason Rishover, CEO of Heronslea: “Increasing the stamp duty threshold from £125,000 to £500,000 from now until the end of March will really give the property market the boost it so desperately needs, and we expect to see an immediate positive response.”
Santhosh Gowda, chairman of Strawberry Star Group: “The stamp duty holiday is a well-thought out move considering the prevailing circumstances, which have impacted the housing market. The announcement is timely, and will help all types of house buyers.”
Bruce Burkitt, founder of Property Experts: “It will provide a welcome boost to the market, as it helps unlock a lot of pent-up demand, especially among first time buyers. It is an extra cost that surprisingly a lot of people don’t factor in when saving for a deposit, so to now be relieved of this could bring a lot of potential purchasers into play.”
Josh Garside, managing director at Paradigm Land: “We’d like to see this implemented over a more sustained period of time to stimulate much needed longer term growth both in the housing market and the economy as a whole.”
Mark Peck, head of residential, Cheffins: “Whilst the virus certainly will have had a long-lasting effect on the property market, it has also meant that many people’s situations have changed and with diminishing pressure to work five days a week from the office, new working hours and other varying priorities, this stamp duty reduction will provide the additional push for many to take the plunge and get on with house moves.”
Kush Rawal, director of residential investment at WhatHouse? Award-winning Metropolitan Thames Valley: “Removing stamp duty from almost all initial share purchases means that key workers will be able to buy a shared ownership home with as little as two months of rent as their deposit.”
Philip Brown, sales and marketing director at Millwood Designer Homes: “A stamp duty holiday is great news for first time buyers looking to get on the property ladder. Providing a saving on properties between £300,000 and £500,000, the maximum saving is £15,000 which is a considerable help to buyers struggling due to the impact of coronavirus.”
Josh Chadd, managing director of Tailored Living Solutions: “The announcement to cut SDLT up to £500,000 is a real boost for the market. It will be a huge relief largely for first time buyers who may now be able to move quicker than before with this final hurdle now removed.”
Richard Beal, chief executive of Beal Homes: “This is excellent news for the housebuilding industry and the housing market. It will encourage more people to move house, which will generate significant new employment in the construction and property industries.”
Kevin Shaw, managing director of residential sales at LRG: “This ‘holiday’ should also go some way to help stimulate the market for younger people, which should be a real priority for the Government – it should be doing all it can to help younger generations get onto the property ladder. Not having to pay stamp duty may encourage more first-time buyers to purchase homes, especially in regions where the threshold is relatively low to the cost of housing.”