The Government are constantly trying to find ways to get the UK economy back on its feet with different incentives for business & the property market in particular. One of the reported ways in which they plan on doing this is by making changes to the current stamp duty policy.
What is Stamp Duty?
If you’re not aware, Stamp Duty is a payment that you may be liable for if you buy a property or piece of land in England & Northern Ireland. It’s a tax that applies in the property transaction process for both the freeholder and leaseholder, and it applies whether you are buying with cash or with a mortgage.
If you are in Scotland or Wales there are slightly different taxes and Stamp Duty doesn’t apply. LBTT is the tax in Scotland which stands for Land and Buildings Transaction Tax & in Wales it’s called LTT which means Land Transaction Tax.
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What are the current Stamp Duty thresholds
Stamp duty currently applies if you buy a property for more than £125,000 although it varies for second properties and you can get a relief if you are a first time buyer, but we won’t dig too much into that here, but we have an article that explains everything you need to know about Stamp Duty.
As a quick overview, here are the Stamp Duty rates:
- £125k – £250k: 2%
- £250k - £925k: 5%
- £925k - £1.5m: 10%
- Over £1.5m: 12%
What are the proposed changes?
We must state, currently these are only the reported changes that are set to be revealed tomorrow. Rishi Sunak, a face you may recognise if you’ve been following the Coronavirus briefings, is the Chancellor of the Exchequer and he’s due to make a statement on Wednesday to reveal the future plans of the country.
It’s thought that this will include a change to the threshold of Stamp Duty. You are currently required to pay Stamp Duty if you buy a property for more than £125k, but this could rise to as much as £500k if the reports are to be believed.
This is thought to only be a temporary measure, although the Government have seemingly been very keen to overhaul the stamp duty issue.
What does this mean?
The property market is struggling a little bit, there are a lot of viewings and properties going up for sale, but the amount of actual purchases is dropping, we touched on this last week. It’s hoped that these Stamp Duty changes will kick start the market in the short term and lead to more home purchases, causing a rush of transactions.
This will hopefully also help stimulate investors into becoming more active in the market, with the amount of people looking to rent properties likely to increase, coupled with the potential reduce cost of stamp duty, it’s seemingly an exciting prospect.
Sell now, buy your dream home, save on stamp duty
When and if this gets announced on Wednesday, the changes are likely only to be temporary. If you’re eyeing up your dream home and want to save a bit of money if and when these stamp duty changes come in, then you might need to sell your property quickly in order to take advantage of the change, which is where we can help.
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