The Chancellor of the Exchequer revealed the budget for 2021 last month and there was plenty of information to take in about stamp duty, mortgages and tax. We have compiled all the information together in one quick and easy read so you can know everything you need about buying a house.
Due to the coronavirus pandemic, the government temporarily increased the price of a property at which stamp duty is paid to £500,000. On the 3rd March, Rishi Sunak announced in the budget that this increase would be extended, ending on the new date of the 30th June. Then the amount of the cost of the property on which stamp duty is payable will still be £250,000. and then finally returning to normal £125,000 at the end of September.
The move was targeted towards buyers who could have taken a financial hit because of the global pandemic and this tax saving could save the average homeowner as much as £15,000 for properties listed at £500,000 or more.
Stamp Duty is banded and so increases the more the property purchase price is. Under the temporary changes any property purchased under £500,000 requires no stamp duty to be paid. Properties costing from £500,001 – £925,000 at 5% and then the £575,000 thereafter at 10%. Anything over the £1.5M will be taxed at 12%.
ts not all bad news though, the chancellor also announced a ‘Mortgage Guarantee’ in the budget, this enables people to save only 5% deposit for a mortgage and be guaranteed a mortgage on homes up to the value of £600,000. Many of the UK’s high street banks will be offering these 95% mortgages from this month.
As we see the end of ‘lockdown’, and things begin to reopen, these changes are in the hope that we can and will ‘kickstart’ the economy again. Even with the pandemic there has never been a better time to secure a home with these savings of up to £15,000 and the best part, if you are quick in finding a property you’ve still got time!