On Wednesday 8th July, the Chancellor of the Exchequer, Rishi Sunak, has announced an increase in the stamp duty threshold in the Summer Update. The key points of the stamp duty changes are:
· Stamp duty threshold is now £500,000
· This increase in stamp duty threshold is set to run until 31st March 2021
· The increase in stamp duty threshold takes place immediately
For the stamp duty holiday, the Stamp Duty Land Tax (SDLT) is as follows:
· When the property price is up to £500,000 – the SDLT is Zero
· For the portion of property price from £500,001 to £925,000 – the SDLT is 5%
· For the portion of property price from £925,001 to £1.5 million – the SDLT is 10%
· For any portion above £1.5 million – the SDLT is 12%
Why has the SDLT changed?
The change has been brought about in reaction to the COVID-19 pandemic, and how it has affected the housing market and property buyers. The new threshold will hopefully help buyers lower the cost of buying a home, making the process more affordable.
How much could a buyer save?
As of July 2020, Zoopla lists the average price of property in Greenwich as £589,418. Previously, a buyer (who was not a first-time buyer) would have paid £19,470 in stamp duty. Now, with the stamp duty holiday in place, the stamp duty for this price is £4,470.
This equates to the £15,000 saving created by the raising of the threshold.
A saving can also be made when considering flats, the property type which is most commonly sold in Greenwich, according to Zoopla.
The average price paid for flats in Greenwich is £452,570. Previously, the stamp duty was £12,628 whereas now, with the stamp duty threshold having increased, there is no stamp duty to pay on this property price.
With terraced properties, which have an average price of £717,939 in Greenwich according to Zoopla, there is more of a saving on offer. Previously, a standard home buyer would have faced a stamp duty charge of £25,896 but now, the SDLT is £10,896.
This equates to a sizable saving for buyers in Greenwich, and if you are looking for guidance on buying or selling in the area, we are here to help.
Mark Hayward, Chief Executive, NAEA Propertymark, comments: “Following our engagement with HMT and MHCLG over the past few months, we welcome the Chancellor’s announcement this afternoon that he will be raising the threshold at which buyers will pay stamp duty to £500,000. This is a welcome commitment by the government and we are glad that they have listened to our calls to help sustain the property market following lockdown.”
Mark continued by saying; “These measures will enable people looking to buy a home to have the confidence and stability to be able to move forward with their purchase, which in turn will have a knock-on effect on the wider economy as people buy white goods and furniture. The market is moving well at the moment, however, once furlough has ceased and the anticipated recession hits, the market might well need further financial impetus, therefore it is right that the sector is given the support and tools it needs to rebound over the next 9 months.”
The British property Federation released a statement, saying; “A temporary SDLT holiday will provide a welcome boost to the build-for-sale market, but other parts of the market equally need further support. To drive the delivery of new, high-quality rental homes, the Chancellor missed a trick today by not giving investors in the build-to-rent sector an exemption from the SDLT 3% surcharge.”
If you need any help or guidance regarding property matters, please get in touch. As your local housing market specialists, we will do what we can to ensure you make your next house move in style. Contact Hunters Greenwich today for all your housing and letting needs.
