What is the stamp duty holiday and how does it all work?
Buying a house, whether it is your first or another property to add to your portfolio, is a very exciting experience.
It is also the most expensive purchase you will probably make in your life.
Not only is the house itself expensive; there are so many other additional costs like stamp duty which can add thousands to an asset which is already very expensive!
But what is stamp duty? What is recent the stamp duty holiday?
What is stamp duty?
Stamp duty was originally put in place to raise government revenue back in 1684. Nowadays, stamp duty is placed on properties only over a certain price bracket.
What is the stamp duty holiday and why is it in place?
As the coronavirus pandemic hit the world in 2020, the UK government introduced a stamp duty holiday to help boost the property market.
The usual price bracket as moved from £125,000 to £500,000. This means that properties under the price of £500,000 do not have to pay any tax.
The stamp duty holiday was introduced because of the economic impacts of the COVID-19 epidemic.
Many people were being furloughed or made redundant, so this holiday was designed to help potential buyers suffering financially get on the property ladder.
In cities where property prices are high, for example in London and Edinburgh, the stamp duty is less applicable.
What about when the stamp duty holiday ends?
The stamp duty holiday is currently due to end in March 2021.
The full impacts of the stamp duty holiday remain to be seen, however house prices are predicted to rise over the next 5 years because there has been an increase in property purchases throughout 2020.
Increase the Value of Your Home
June 2020 saw the quickest increase in construction activity in 2 years.
Read more about the trends of the property market.
Buying a house during the stamp duty holiday
Whilst the stamp duty holiday continues, it can be good to take advantage of the money-saving venture, whether you are a first-time buyer, or property developer.
If you are looking to buy a property or plot of land to develop, then it may be a good idea to reap the benefits of the stamp duty holiday.
As well as saving money due to the stamp duty holiday, borrow from the UK’s top property development finance lenders. More here.