On 8th July Chancellor Rishi Sunak announced a major tax cut for home buyers, with a temporary waiver of Stamp Duty Land Tax for all properties valued up to £500,000.
First Time Buyers already pay no stamp duty on the first £300,000 and a reduced rate up to £500,000, which has now dropped to zero as a result of the cut.
For others, the reduction will reduce the cost of buying a new home by up to £15,000, giving a welcome boost to the housing market.
With availability of mortgages for those with small deposits very limited at the moment it could also help make purchases more feasible, potentially adding around 3% to the existing deposit.
Landlords and those buying second homes will also benefit from the reduction, though the 3% SDLT surcharge will still apply.
The change only applies to purchases in England and Northern Ireland, as Scotland and Wales set their own land taxes. Scotland has announced its intent to increase the nil rate band to £250,000 as soon as possible. Homebuyers in Wales will have to wait to see if the Welsh Government decides to take similar action.
The stamp duty reduction is scheduled to last until the end of March next year. With the deadline coinciding with what is typically an already busy period, that is likely to put pressure on lenders and conveyancers, so buyers would do well to allow plenty of time for their purchase to go through.
You can see how the change may affect your stamp duty bill using our Stamp Duty Calculator.
Stamp Duty Boost for Homebuyers