The Chancellor’s summer statement brought good cheer to those fortunate enough to be able to afford to buy or invest in property. The £125,000 Stamp Duty start-point has been lifted to £500,000 for anyone buying a main home, saving £15,000 in tax for anyone buying at the maximum tax-free price.

First time buyers may not feel much benefit as they were already exempt from paying any Stamp Duty up to £300,000. The majority of first-time buyers we have sold to in the past 12 months have purchased for less than £300,000, but the few who did purchase over £300,000 would today make a saving. Today, first time buyers purchasing at £400,000 would save £5,000 compared to last week for example. That’s the price of a decent new bathroom perhaps?

Buy-to-let landlords and companies also benefit from the Chancellor’s tax changes. They also benefit from the increase in the Stamp Duty threshold being raised to £500,000 but they will still have to pay the ‘second property surcharge’ of 3%. Previously, anyone buying a second home or property (e.g. for investment) would have had to pay the standard 2% rate plus the higher rate of 3% i.e. 5%. Until the 31st March 2021 they will save the 2%. On a typical £180,000 buy-to-let that will save £3,600 in tax.

The previous rates still apply to all purchases above £500,000.

This is an excellent opportunity for second time buyers to make the step-up to their next home, or for buy-to-let investors to expand their portfolios, and help boost the Private Rented Sector housing stock – with so many job losses at the moment many people will not be able to buy a property and will rely on the Private Rented Sector for a home. The tax changes landlord’s have faced over the past few years has been a disincentive to hold rental property, with many landlords selling up. This has reduced the number of properties available to rent, pushing up rental values disproportionately.

To take advantage of the changes to Stamp Duty you need to complete your next purchase by the 31st March 2021. That appears to be a long way away, but in terms of a property sale, you need to be taking action now or in the next few weeks to ensure you don’t miss the opportunity!