Tag Archive: Stamp Duty
With immediate effect, the new Stamp Duty Land Tax (SDLT) threshold of £500,000 will apply and will run until 31 March 2021. This means any buyer purchasing a primary residential property between 8 July 2020 and 31 March 2021, up to the value of £500,000, will be exempt from paying Stamp Duty.
Victoria Linsley, says according to a release by the Government the exemption will apply to all primary residential property purchases, so regardless of whether the purchaser is a first-time buyer or someone who has owned a property before.
She adds that on purchases over the £500,000 threshold, buyers will pay a 5% SDLT on the portion from £500,001 to £925,000, 10% on the portion from £925,001 to £1.5 million and 12% on any portion over £1.5 million.
Visit gov.uk for more information
When it comes to purchasing a second home, Linsley says that the Government has introduced higher additional rates with a 3% higher rate on top of the newly revised standards. “So, what this means is that people purchasing a holiday home up to the threshold value of £500,000 will pay 3% SDLT.
Those buying a second home over the threshold will pay 8% on the portion from £500,001 to £925,000, 13% on the portion from £925,001 to £1.5 million, and 15% on the remaining portion over £1.5 million,” Linsley explains.
Visit gov.uk for more information
She notes that on new leasehold sales and transfers, the nil rate band which applies to the net present value of any rents payable for residential property is also increased to £500,000 until the end of March next year. An SDLT of 1% will be charged on any net present value of any rent over the threshold.
Victoria says that it is not just individuals that will benefit from the changes. “Companies purchasing residential property under the £500,000 threshold will also be exempt from the paying SDLT. In addition, companies that buy a residential property of any value that meet the relief criteria from the corporate 15% SDLT will also benefit from the change made.”
From 1 April 2021, the SDLT holiday will come to an end and the SDLT regulations will revert to what they were before these temporary changes were announced. “We will likely see a rush of activity before 31 March 2021, with those who have access to finance making the most of the opportunity the SDLT holiday provides,” Linsley concludes.
Use The Guild of Property Professional Stamp Duty Calculator to work out how much you will have to pay for the property you buy.
Looking to find a new home under the threshold? View this selection of properties under £500,000 or contact your nearest regional office today:
Northumberland – 01665 603581
County Durham – 01833 690390
Yorkshire – 01677 425301
The property market appears to be at a crossroads, figures released this week show that property values fell for the fourth straight month in June, the last time that occurred was in 2010 during the financial crisis. However, agents would all rally with the cry that they have never been busier since the relaxation on lockdown restrictions on Wednesday 13th May.
Property values in June were 0.1% lower than in May according to figures from Halifax. The fall last month followed month-on-month price falls of 0.2% in May, 0.6% in April, and 0.3% in March.
Add to the mix that mortgages searches rose 100% in June compared to the previous month exceeding one million for the first time since lockdown began and predictions that property prices are set to rise in July and August with some predicting that the North will enjoy the most upward movement in prices with the capital the weakest.
HMRC figures showed a 50% drop in the number of property transactions year-on-year, this unsurprising as many deals will only now be filtering into the system following the market restart.
Typically, June is the strongest month for mortgage activity in the UK but nothing about 2020 is typical and consumer confidence is key to many areas of the economy.
Sally Hart, Head of Agency, said: “The UK housing market is finely balanced as is much of the economy but all of our regional teams are still reporting that demand is outstripping supply at the moment and that both buyers and sellers are optimistic in their approach to the market”.
The announcement yesterday that Stamp Duty will temporarily be cut with immediate effect so that between now and 31st March 2021 most transactions below £500,000 will not be subject to a charge, a move which should result in up to 90% of transactions paying no Stamp Duty during this period (note that second homes, etc are still subject to additional uplifts over standard rates).
“Rishi Sunak has the unenviable task of ‘unlocking’ the economy and how he approaches that will be crucial to the property market” continues Sally.
The next three months will be key for many sectors and are likely to be a significant indicator and the basis for both households and businesses to set their plans for the immediate future.
Sally comments: “Housing activity has already rebounded strongly since the market reopened and with mortgage lenders increasing the number of products and the announcement today on Stamp Duty we are confident that the property market will respond positively, it may not lead to a greater number of transactions that the market would typically see overall but it will encourage those currently wavering to have the confidence to step into the market sooner”.
If you are considering placing your property on the market and would like advice please contact your regional team today:
Northumberland & Borders – 01665 603581
County Durham – 01833 690390
Yorkshire – 01677 425301
Yesterday, Philip Hammond announced his second Budget as Chancellor. Our team share their opinions on announcements affecting their sectors.
Partner, Head of Planning and Development
As anticipated, there have been several significant measures affecting the development industry in yesterday’s budget, with a total of £44bn being allocated over the next 5 years with the intention of boosting housing delivery over 300,000 units per year. Measures include £8bn of financial guarantees to support house building and the private rented sector, alongside £1.1bn to unlock strategic sites and new settlements. On a smaller scale the measures also included a £630m pot for smaller sites, with a view to helping the delivery of 40,000 new homes.
Amongst the announcements was also a curious proposal of reviews into reasons behind delays for developments coming forward after grant of permission and a seemingly linked statement that land banked for “commercial reasons “could be compulsory purchased. Whilst a headline winning statement along similar lines of previous Labour suggestions, I suspect the reality is highly unlikely to have a real world impact. Anyone involved in the technicalities of planning, site appraisal and delivery as well as compulsory purchase has an idea as to how hard a test that would be to prove. Any compulsory purchase would be at market value, which also begs the question, who would fund it and what would happen once it has been compulsory purchased? Sell it to another house builder perhaps to put into their land bank? No doubt, more detail will emerge over the coming days and weeks.
Partner, Head of Commercial
Several positive initiatives have come from the Autumn Budget, especially for the commercial and construction sector. News that, from 1 April 2018, operators of illegal waste sites will become liable for Landfill Tax will see a sigh of relief from ‘formal’ operators, ensuring landfill is sent to their sites. The £44bn in overall government support to meet the target of 300,000 homes a year and the £400m to regenerate housing estates is great news for the construction industry considering the sheer amount of materials needed to fulfil the demand.
Looking into the Northern region in particular – we are to see £320m to clean up the former SSI steelworks at Redcar and kick start the 25 year development plan which will see the site transformed into a ‘hotbed’ of new industry. This is fantastic news for the region as it gives the prospect of 20,000 new jobs which is crucial for economic growth and development across the Tees Valley.
Head of Residential Agency
For first time buyers it takes so long to save for the deposit to secure a mortgage and added to that the additional funds required for stamp duty mean it is often a lengthy process before they can become homeowners. The announcement today that stamp duty is to be abolished for first-time buyers on homes up to £300,000, with immediate effect, will be a welcome change and we hope it will have a positive impact on the overall housing market.
Over the last few years we have seen many changes in legislation when it comes to buying and selling property. Many have little or no direct effect to the homeowner or buyer but there are a few changes which are important to be aware of.
On 1 October 2013, the Property Misdescriptions Act 1991 (PMA), which previously made it a criminal offence for estate agents to make false or misleading statements about properties being offered for sale, was repealed. This has been replaced by Consumer Protection Regulation (CPR) and although CPRs have been in force for 5 years, they are still unfamiliar to many estate agents and consumers. In short estate agents are prohibited from engaging in commercial practices that are unfair to sellers, buyers, potential sellers or potential buyers of residential property.
Therefore, agents need to be extra careful about how they advertise properties for sale or lettings, and to make sure their particulars on properties are accurate. Describing properties as ‘stunning’, ‘desirable’ or in a ‘quiet area’ now need to have evidence to back up such statements. Furthermore, agents’ particulars which might have misleading omissions are also caught by the new Regulations. Whereas the previous PMA legislation left the onus on the buyer there is now a legal obligation for the seller or landlord to disclose any information which may affect a person’s decision to buy or let. Due to the lack of Case Law it is certainly open to interpretation on what those factors may be but our position is transparency and honesty all the way.
Another significant change coming into effect on April 1th 2016 is the increase in stamp duty to second home buyers. Guidelines are currently available as to what the changes may be and the policy will be outlined at the 2016 Budget on March 16th. Although at first glance some of our buyers have assumed this change would not affect them as they were buying the property for personal use and not rental, it is not just landlords that will be hit but anyone owning a second home.
This could be parents buying a property for their children or a couple purchasing a home together where one is already a homeowner. Like many of our clients, homeowners who want to buy another home before selling their current one will still be affected by the increased stamp duty, but a refund is available if the previous main residence is sold within 18 months.
The proposed higher rates will be 3% above the current residential rates, including the 0% band. For example, anyone buying a £200,000 second home or buy to let before April pays stamp duty of £1,500. This is based on paying 0% on the first £125,000 of the property value and 2% on the portion between £125,001 and £250,000. From April, buyers will have to pay 3% for the first £125,000 and 5% instead of 2% on the amount between £125,001 and £250,000. This gives them a total bill of £7,500.
If you are considering selling a property that is likely be sold as a second home it may be worth marketing now as buyers looking to invest will likely want to do so before the increase comes into play in April.
Should you want to discuss any of the above in more detail or any other property related matter we are always available to help you – simply contact your nearest office.