If you have been planning to move home now might just be a perfect time! After the stamp duty holiday announcement that Rishi Sunak made earlier this year, property buyers will not be charged stamp duty on the first £500,000 of the purchase price, as long as the property transaction is in England or Northern Ireland.
The stamp duty holiday is geared towards boosting the housing market and helping buyers who are struggling to own new properties amidst the coronavirus pandemic. You have until 31 March 2021 to take advantage of this financial aid.
For first-time property buyers, stamp duty is the tax that you pay when you purchase a property over £125,000. The rate varies across the country. In England and Northern Ireland, it is called Stamp Duty Land Tax. In Scotland, it is called the Land and Buildings Transaction Tax. In Wales, it is called the Land Transaction Tax.
The announcement made by the Chancellor is only applicable for property purchase within England and Northern Ireland.
If you are planning to purchase your next home before 31st March 2021, you will be exempt from paying stamp duty on a purchase price up to £500,000, you will however be taxed on any value above £500,000. The stamp duty band indicates that properties that cost between £500,001 and £925,000 will have to pay a 5% tax rate, properties that cost around £925,001 to £1.5 million will receive a 10% tax rate while properties that cost more than £1.5 million will receive a 12% tax rate.
So who qualifies? The stamp duty holiday is applied to any purchase transaction that completes between 8th July 2020 to 31st March 2021, provided that the property indicated will serve as their main residence, is located within England and Northern Ireland, and costs £500,000 or less.
How about second-home buyers and landlords with multiple properties? The answer to these questions is a resounding yes but, they have to take note of the 3% stamp duty that is applicable under the regular rules.
If you have already made a property purchase before 8 July 2020, you are liable to pay the stamp duty. First-time property buyers are also required to pay stamp duty if their purchase has exceeded £300,000.
The stamp duty must be paid upon completion, so as long as your transaction is completed on or before the 31st March 2021 you will benefit.
The stamp duty holiday can give an average home buyer a savings of up to £15,000. If you can make this kind of saving then why don’t you use it to improve your new home?
Using the Saved Funds to Spend on Your New Home
If you’ve found your perfect home but you feel you may need some more room maybe you could use the money you’ve saved on stamp duty to build a house extension. Perhaps reconfiguring the floorplan on the ground level can add the extra space you need or adding an extra storey will allow you to create a new home office and an extra room which you can use as a family space or relaxation room.
Whatever ideas you are trying right now, you must know that house extension needs thorough planning from start to finish. When putting into action your plans, you need a team of highly-skilled professionals to make this possible. When it comes to understanding every step of your dream, R & R Design and Build Contractors can source all the right materials to ensure that your project is completed exactly to your specifications. To enquire or get a free quote, call us on 01793 820 900 today!