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· 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 Stoke Newington as £709,901. Previously, a buyer (who was not a first-time buyer) would have paid £25,495 in stamp duty. Now, with the stamp duty holiday in place, the stamp duty for this price is £10,495.
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 Stoke Newington, according to Zoopla.
The average price paid for flats in Stoke Newington is £461,282. Previously, the stamp duty was £13,064 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 £1,072,962 in Stoke Newington according to Zoopla, there is more of a saving on offer. Previously, a standard home buyer would have faced a stamp duty charge of £51,046 but now, the SDLT is £36,046.
This equates to a sizable saving for buyers in Stoke Newington, and if you are looking for guidance on buying or selling in the area, we are here to help.
Former RICs chairman welcome the stamp duty change
Jeremy Leaf is a former RICS residential chairman, and he said; "The stamp duty holiday has been well trailed but is welcome not the less. The most pleasing aspect is that it is due to start immediately because if it had been delayed it would have had a negative impact on the market until it was introduced.“
Jeremy continued by saying; “The Chancellor is clearly under pressure to reduce the prospect of unemployment getting out of hand and the economy plunging into an even deeper recession. The housing market is a key driver of activity with its multiplier impact on other businesses, as well as its positive impact on job and social mobility. What’s good for the housing market is good for the economy. However, we will be looking to see an impact on transactions rather than prices as we try to keep pent-up demand momentum moving, even as furlough and other government support is withdrawn.”
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 Stoke Newington today for all your housing and letting needs.