What does the stamp duty holiday mean for you?
Warwickshire homebuyers are no longer required to pay stamp duty on homes of up to £500,000, if purchased before April 2021. But what does this mean for you? Whether you’re buying or selling, there’s plenty to be happy about.
At Charles Rose Properties, we help buyers and sellers make their next move in the Warwickshire housing market. The stamp duty holiday is expected to affect 9/10 property transactions, with both buyers and sellers benefitting. We’re providing our insights into how the stamp duty holiday could affect you, whether you are selling your home or buying a new home.
What is the stamp duty holiday?
The Stamp Duty Land Tax (SDLT) holiday was introduced by the Chancellor, Rishi Sunak, with effect from 9 July 2020 and with a planned end date of 31 March 2021. In simple terms, it means anyone in England and Northern Ireland can buy a home valued up to £500,000 without paying stamp duty.
This threshold has been increased from £125,000, with the aim of stimulating the property market and wider economy. And it’s working, as buyers and sellers alike are recognising this is a great time to take action.
What does it mean for buyers?
On the face of it, homebuyers benefit most from the holiday, as they are usually responsible for paying stamp duty. Previously, buyers would pay banded duty from 2% on a sale price of £125,001 to £250,000 and 5% from £250,001 to £925,000.
This means an average stamp duty saving of £4,500, up to a maximum of £15,000. The holiday has less impact for first-time buyers, who were already exempt from paying duty up to £300,000, and does not apply to second-home buyers or buy-to-let landlords.
What does it mean for sellers?
As with the previous stamp duty holiday, during the 2008 financial crisis, there are indirect benefits for sellers. With stamp duty no longer a factor for buyers, it’s potentially possible to achieve a better selling price.
With the threshold increased, sellers have no incentive to entice buyers by pricing their home lower, especially just shy of the previous £250,000 breakpoint. It’s a win-win for sellers, who typically also become buyers, as they also enjoy the same stamp duty exemption on their purchase.
Is this a good time to buy or sell?
In a word, yes. That’s to say, it’s a good time for both buyers and sellers. Beyond the obvious financial benefits, more property for sale in Leamington, Warwick and the wider area means more choice for buyers. And more buyers means increased competition for properties, with sellers set to benefit.
So, if you’re on the fence about buying or selling, now is the time to make your move.
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