Temporary stamp duty tax holiday relief – if you are buying a home under £500K you’ll now save £1000’s on tax!
On the 8th of July 2020, the Chancellor Rishi Sunak temporarily raised the tax threshold from £125,000 to £500,000 in a bid to help home buyers.
The temporary stamp duty land tax (SDLT) relief, introduced to help maintain momentum in the housing market and help the economy get back on its feet, it exempts the first £500,000 of a property’s purchase price from the rate of SDLT until 31st March 2021 in England and Northern Ireland.
The average purchase price for a house in the East Midlands is £185,200 which represents a £1,250 saving. We have updated our stamp duty calculator to reflect these changes.
It’s a much larger impact for those buying a property for £500,000 or more which will result in a £15,000 reduction in transaction costs. These savings coupled with the 90% surge in desire to live in lower Covid-hit countryside locations has attracted a surge in buyers from London looking for more expensive countryside village homes located in the East Midlands.
For those buying second homes or investment properties, the 3% additional homes surcharge will still apply to first £500,000 purchase price.
What is stamp duty?
Home buyers must pay stamp duty when buying a home or piece of land worth £125,000 or more in England and Northern Ireland. It is charged on a tiered basis (so you only pay the higher rates on the slice above any threshold – the same as income tax).
These were the SDLT rates prior to 08/07/2020:
- Up to £125,000: 0%
- On the portion from £125,001 to £250,000: 2%
- On the portion from £250,001 to £925,000: 5%
- On the portion from £925,000 to £1.5m: 10%
- Above £1.5m: 12%
These are the new SDLT holiday rates in effect from 08/07/2020 to 31/03/2021:
- Up to £500,000: 0%
- On the portion from £500,001 to £925,000: 5%
- On the portion from £925,001 to £1.5m: 10%
- Above £1.5m: 12%
Steps to buying a home
For a first time home buyer, who may not know what steps to take in the home buying process, below is a recommended overview that most (but not all) buyers take:
- Decide on how much you want to spend on a new home
- Find out how much cash you’ll need as a deposit (this amount will vary depending on your circumstances)
- Find out how much it will cost in legal fees to process the transaction – TRY OUR FREE INSTANT CALCULATOR
- Contact your bank or a mortgage advisor to get a mortgage pre-approval certificate (these are usually only valid for a period of a few months, check with your lender as times will vary)
- Find the home of your dreams – it’s your biggest lifetime purchase so make sure you LOVE it
- Make an offer to the seller
- Have your offer accepted by the seller
- Find and instruct conveyancing solicitor to process the legal transaction of buying your home, this step is where the largest delays happen so make sure you do your research and chose someone reputable. They are the ones that ensure you know EXACTLY what you are buying and they will keep your move-in date on track.
Steps in the transaction of legally becoming the new property owner
This legal process of transferring a property into your name is called conveyancing.
Many clients come to us with worries about all the horror stories they’ve heard about lengthy delays while a buyer is eagerly awaiting to move into their new dream home. The legal transaction of buying a home often feels like smoke and mirrors and finger pointing between the multiple parties involved (you, your solicitor, your bank, the buyer and the buyers solicitor).
WATCH OUR VIDEO: We’ve created a short 3 minute video that explains the legal process of buying your home.
We’ve also created this handy guide to clarify the steps, who is responsible for each step and how long each step typically takes.
Why Hopkins & how we can help
Hopkins are a law firm with a highly regarded local reputation and we have one of the highest law firm client satisfaction rate in the country. We understand how frustrating and confusing the conveyancing process can be so our legally qualified staff are here to support and guide you clearly through the process.
When it comes to buying a home, we know it’s all about making the purchase go as quickly as possible and being able to plan for the legal costs. Our fees are extremely competitive and also transparent right from the start so you won’t find any hidden and unexpected charges that you haven’t budgeted for.
In addition, we have highly experienced staff on site that can help with other legal aspects that might be tied into your purchase such as first-time buyer schemes, co-habitation agreements for unmarried couples buying a home together, writing or updating your Will to include your new asset or even landlord-tenant agreements if your purchase is a letting investment.
Our online search facilities and automated case management system keep everyone informed through the stages, together. But it’s more than automation. It’s about our personal face-to-face service. You aren’t just a number to us, you are a person, and we want to protect your best interests now and in the future.
In the end it’s about buying your home as quickly and hassle-free as possible.
Try our quick and easy FREE INSTANT CONVEYANCING AND TAX FEES CALCULATOR to find out exactly how much you’ll need to budget for, our Fixed Fees start at only £570.
Or pick up the phone can give our conveyancing team a ring on 01623 468468 or 0115 910 5555 or use the enquiry form below and someone will get in touch within 24 hours.Request a Callback
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