Why Now Could Be a Great Time to Move Home

Have you been thinking about moving? Either by buying a larger property, buying a second home or downsizing and renting one property out to give you additional income. Whichever type of move you are thinking about, has there ever been a better time buy than now?

In an announcement by the Chancellor on the 8th July, between now and the 31st March 2021 there is a stamp duty holiday for home buyers. Normally stamp duty is waved up to a house value up to £125,000 (£300,000 for first time buyers), but this has been temporarily increased to £500,000.

So, if you want to move to a larger home, now is the time. You can save thousands on stamp duty and be able to use what you save on stamp duty and invest the funds back in to your house by renovating and building the dream home you deserve.

If you're buying a second home this is slightly different. Stamp duty has still been reduced, but from 5-8% down to 3% on second homes up to the value of £500,000. Still a significant saving if this is something you’ve been hesitating on.

Why Government Reduced Stamp Duty?

The housing market in the UK is worth over 7 trillion and if people stop buying or moving to a new house, then the government lose out on a large amount of revenue that they receive from stamp duty.

By reducing the stamp duty, they hope to keep the housing market alive long enough to restart the economy and to also boost jobs in the building sector. Savings that home buys receive can be spent on renovations and home improvements, further improving the value of your new home, meaning spending in the economy is increased.

It's also hoped that a reduction in stamp duty will help buyers have some confidence in buying a home during what is currently an economic downturn post coronavirus.

Only England and N. Ireland Benefit

Unfortunately, at the time of this announcement, the stamp duty saving only covers England and Northern Ireland. The stamp duty holiday doesn't include buyers in Scotland who will still pay building transaction tax or Wales where land transaction tax will still be due.

How Much Do I Save?

You can calculate the amount of stamp duty you pay on The Money Advice Service website. At the time of writing this post, they are still updating the systems to reflect the changes, but buying a property worth £500,000, would normally cost you £15,000 in stamp duty, which is a significant saving if you are thinking about moving.

Money Advice Service states “Stamp Duty is paid at different rates, depending on the purchase price. For example, someone subject to Stamp Duty buying a property for £245,000 would pay no tax on the value of the property up to £125,000 and 2% tax on the property value between £125,001 and £245,000. In this case, total liability for Stamp Duty would be £2,400 giving an effective tax rate of 1%. Those subject to the additional rates of stamp duty rates will pay an extra 3% on top of the relevant standard rate band. In this example that would represent an extra £7,350, meaning the total stamp duty would be £9,750 giving an effective tax rate of 4%.”

Should you Move Now?

There are some significant savings to be received, but only you can decide if now is a good time to move. This article is not financial advice and deciding when to move is your decision. It is up to you to seek any financial advice on mortgages and savings you may receive under this scheme. The value of houses can go up and down and it is up to you to upkeep any payments to lenders.