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We are having a great day today rejoicing in the new announcement from the government regarding the temporary reductions in Stamp Duty Land Tax designed to keep the housing market afloat. The new rates apply from today and for some home movers, this will mean that there is no duty to pay at all. Any property purchased up to the value of £500,000 before 31st March 2021 will not attract any SDLT at all. This is a whopping saving of £5k on an average property price of £300,000.
What does the Stamp Duty holiday mean for buyers?
The removal of Stamp Duty obligations on the average family home will be an extremely welcome relief for anyone currently selling or buying. For buyers, it will reduce the overall costs of moving and could free up some important funds for contributing more towards a deposit, since mortgage lenders have become stricter in some scenarios, requiring a greater deposit. For others, it’ll mean that there is more cash left over to make a property their own, including buying furnishings or completing renovations. It could also open up a wider choice of properties for first-time buyers, who previously only enjoyed the discount on a property up to £300,000 in value.
What does the SDLT discount mean for sellers?
For sellers, this is great news. Firstly, the Stamp Duty holiday removes the barriers to negotiation due to the standard SDLT thresholds. For example, some buyers may make offers based on the threshold amounts, so properties listed around the £260,000 mark are vulnerable to the increase in SDLT at £250,001 and the buyer may try to knock the price down to avoid the extra tax.
Less SDLT means that when you sell your home if you are buying elsewhere, you’ll receive more funds from the equity of your house sale because your solicitor won’t need to deduct SDLT for your purchase. This could mean a greater initial deposit, reducing the lifetime cost of the mortgage on your new home.
And most importantly, the temporary removal of SDLT on properties up to £500,000 will tempt more people into moving home. Quite often, families that are settled but have a desire for a bigger garden, more space or an extra bedroom put off moving due to the overall costs of buying a home. But now those costs could be halved, with just the solicitor fees, surveys and removal costs to pay for, making a move seem less frivolous and much more practical.
For those trying to sell an older property, it could also tempt in a new kind of buyer who may have previously shied away from a little renovation. With an extra £5k in their pocket, buyers will probably feel more confident about making an offer on the house knowing the bathroom might need an upgrade or that the carpets need replacing.
How can Oakley Property help me enjoy the Stamp Duty Holiday?
If you’ve previously viewed a property with us, we can help you work out the savings and understand whether that might help you feel ready to make an offer on that property. If you’re currently in a chain with us, we’re happy to help you work out your savings. If you’re currently eyeing up a new build property to buy off-plan, we’ll gladly explain the new costs of buying your new home, and we may also have other added incentives from our developers to throw in, so it’s always worth staying in touch with us. And finally, if the news has compelled you to finally put your house on the market ready to move on, we’ll be very pleased to offer you a free valuation.
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