Stamp duty holiday could be on the way, so if you’re thinking about buying property now could be a great time to get looking around.
The government is considering a temporary stamp duty holiday on properties costing up to as much as £500,000, in an effort to boost the UK housing market as part of the country’s economic recovery.
It’s widely anticipated that a six-month stamp duty holiday will be announced this week as part of government plans to support the economy. The new threshold, if approved, will then come into effect in a few months.
At the moment, stamp duty becomes payable at £125,000 and is paid on a sliding scale. First time buyers are already exempt from stamp duty on homes less than £300,000 or £500,000 in London.
The property market is important to the economy and many would like to see more support aimed at first time buyers. This particular group is seen as the lifeblood of the housing market as they tend to move up the property ladder, helping to release chains.
Whilst in support of the government proposal, many think stamp duty holiday ought to be introduced immediately to prevent buyers putting their moving plans on hold and slowing down the momentum that’s been building since the housing market re-opened.
Tomer Aboody, director of MT Finance, added: “While plans for a stamp duty holiday are a step in the right direction, what has been suggested so far doesn’t go far enough. The threshold for higher-end properties – £1m-plus – is still at extraordinarily high levels, which prevent many from selling or buying. While giving a stamp duty holiday at entry level, why not also reduce the higher-end stamp duty to previous levels where it was a set amount? This would allow, even for a short period, for the market to evolve, and for buyers to move up and down the ladder more easily. This, in turn, would stimulate the economy as people move, develop, refurbish, buy furniture – bringing in a lot of business across the board and boosting jobs.
“Many older buyers who would like to downsize would also benefit as they understandably do not want to spend a big chunk of retirement income on stamp duty when selling up and buying something smaller. Overall the Chancellor’s ambition and help throughout this difficult period has been extraordinary. The stamp duty problem is one which has been an issue for a few years now, and it is time to tackle it.”
There are also calls for the government to look at the housing market still further, with a view to fixing long-standing issues, particularly in the buy-to-let sector which is predicted to grow as millions more turn to renting.
Sarah Naylor, partner and head of commercial and property, commented: “Addressing the stamp duty issue in the buy-to-let sector would give investors the opportunity to increase the supply of rental homes. We shouldn’t under-estimate the part landlords also play in boosting off-plan sales, which will of course benefit the construction industry.”
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