Lynne Lancaster, head of estate agency, assesses the Chancellor’s stamp duty changes, designed to stimulate the property market.
With demand for property at a welcome high level, one thing was needed to help create what could be the most active market since the great recession and that was greater affordability.

The Chancellor has gone a long way to help through his mini-budget. From 8th July 2020 until 31st March 2021 there will be a temporary stamp duty holiday on the first £500,000 of all property sales in England and Northern Ireland. This does not affect Scotland and Wales, which have their own property transaction tax regimes.

Under Sunak’s change buyers of second homes and buy-to-let properties will also benefit, but they will still have to pay the existing 3% extra duty due on the entire price. During this tax holiday, the average stamp duty bill will fall by £4,500, and almost nine out of ten people buying a main home this year will pay no stamp duty at all. Anyone buying a home for around £475,000 will save almost £14,000 in tax.

We in the property industry have long called for the government to review this tax as it has become a serious hindrance to buyers. Although seen as unfair by many, the government’s annual return from stamp duty is around £12bn - roughly equivalent to 2% of the Treasury's total tax income. However the Prime Minister has said in the past that he wanted to review duty up to £500,000 and reduce the top rate – on homes costing more than £1.5 million at a suggested reduction from 12% to 7%.

The new stamp duty level and the increased desire by many to make a lifestyle change mean this is the best time for years to buy a property and as any farmer will tell you, make hay while the sun shines.

If you would like any further information, please contact your local PFK office. https://estates.pfk.co.uk/contact/