Many people moving home of late have enjoyed a significant drop in the overall cost of moving thanks to the Stamp Duty Holiday.
Introduced in July, the Stamp Duty Holiday was brought in by chancellor Rishi Sunak to help boost the housing market in the face of the COVID-19 pandemic.
This has, according to ReallyMoving, seen the average cost of moving fall to £6,669. This figure marks a serious drop for many movers compared to what they would have faced pre-Stamp Duty Holiday, with some likely to save in the region of £4,000.
What’s Stamp Duty?
Stamp Duty Land Tax must be paid in England whenever a person buys a freehold property. The tax also applies when a person buys a new or existing leasehold, buys a property through a shared ownership scheme, or is transferred land or property in exchange for payment.
Previously, Stamp Duty would have to be paid on any property costing more than £125,000 in England and Northern Ireland. But Sunak has changed this figure to £500,000, meaning the benefits of the ‘Holiday’ apply to nine out of ten property purchases.
What’s the Stamp Duty Holiday?
The Stamp Duty Holiday is ultimately a bid to galvanise a housing market that has been hit by the COVID-19 pandemic.
It can act as an incentive to proceed with any house move plans, particularly as significant sums of money could be saved by home movers if they move sooner rather than later.
Sunak announced that the Stamp Duty Holiday is to run until 31 March 2021, providing ample time for those looking to capitalise on the savings on offer.
What does that mean for me?
The Stamp Duty Holiday is definitely good for some buyers – particularly home movers who are looking to move to a property valued at less than £500,000.
But sadly not everybody will be able to capitalise. Most first time buyers for example have not benefited from the ‘Holiday’. This is because many first time buyers were already exempt from paying Stamp Duty on property purchases up to £300,000. This initiative was brought in back in November 2017 as another attempt to boost the housing market and support those trying to get a foot on the property ladder.
This exemption, good though it is for first-time buyers, means they have not benefited from the Stamp Duty Holiday. Instead, their moving costs have increased due to hikes in the cost of surveys, moving fees and legal fees.
Time to get moving?
The Stamp Duty Holiday is really useful if you are looking to move home or remortgage. It means you can save on costs and potentially reinvest any savings you make into paying off your new home, or spending it on other elements of your home move.
For first time buyers, not having to pay Stamp Duty on properties of up to £300,000 is a real bonus when looking to get onto the property ladder. So while the ‘Holiday’ may not be of much relevance, the benefits of buying a home while that discount applies are still substantial.
If you would like mortgage advice tailored to your needs as a contractor or freelancer, or are simply looking for a residential mortgage, Roots Mortgages can help.
Our expertise across contractor mortgages and freelancer mortgages has seen us help our clients make positive decisions in the property market.
You can use our mortgage calculator to get started, and if you would like a 30 minute mortgage appointment, you can book one with our expert team today.
