Your local property experts bring you the latest industry news, this month written by Matthew Jewison, Sales Manager on behalf of Foxes Sales & Lettings.
In July 2020, the Government temporarily raised the stamp duty threshold to £500,000, meaning a huge saving for many homebuyers. Not surprisingly, this change played a significant part in stimulating the housing market post-lockdown. But the thresholds are set to revert back soon – so if you’re planning to move, the time to act is now.
Stamp duty is a tax on property purchases, and is usually paid in increasing portions on the purchase price. The temporary change means that until 31 March 2021, the majority of people can buy a residential property up to the value of £500,000 and not pay a penny in stamp duty (assuming it’s their only home).
However, from 1 April 2021, the thresholds will revert back to where they were before 8 July 2020. With the average house price in Bournemouth currently just over £300,000, that means the average local buyer will pay no stamp duty before 31 March; after that date, the
stamp duty on a £300,000 property would be £5,000 –and the higher the property price, the bigger the bill.
Stamp duty rates up to 31 March 2021
- Up to £500,000 Zero
- Next £425,000 (portion from £500,001 to £925,000) 5%
- Next £575,000 (portion from £925,001 to £1.5 million) 10%
- Remaining amount (portion above £1.5 million) 12%
Stamp duty rates from 1 April 2021
- Up to £125,000 Zero
- Next £125,000 (portion from £125,001 to £250,000) 2%
- Next £675,000 (portion from £250,001 to £925,000) 5%
- Next £575,000 (portion from £925,001 to £1.5 million) 10%
- Remaining amount (portion above £1.5 million) 12%
Although first-time buyers will benefit from a discount from 1 April (no stamp duty up to £300,000, then 5% on the portion from £300,001 to £500,000) the change will push up the cost of moving again for many. So if you’re dreaming about that new home, there’s never been a better time to turn that dream into a reality!
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