09/03/2021
In his latest Budget the Chancellor, Rishi Sunak, has announced the extension to the stamp duty holiday meaning that, those who are in the process of buying, still have the chance to complete within the extended three month period and, as a result, benefit from the savings on offer.
What is the stamp duty holiday?
The stamp duty holiday was announced last July, in response to the current pandemic, and meant that no stamp duty was payable on the purchase of residential properties under the value of Β£500,000. The holiday was intended to last until 31 March 2021. Before the holiday, tax would be payable for any property over the value of Β£125,000 β the amount being dependent on the value of the property.
What has changed?
There has been a three month extension to the stamp duty holiday until 30 June 2021.
From 1 July 2021 β until 30 September, stamp duty will still not be payable on properties under the value of Β£250,000.
From 1 October β the stamp duty will begin to apply for properties valued Β£125,000 and above, with pre-Covid stamp duty thresholds and levels resuming.
The Chancellor also took the opportunity to announce that buyers looking to purchase a property could now benefit from a new government backed mortgage scheme.
What is the Mortgage Guarantee Scheme?
The scheme, which will be available from April 2021, means that first time buyers, as well existing homeowners, will only need to raise a deposit of 5% of the value of the property with mortgage lenders then incentivised to offer the remaining 95% through a mortgage loan.
What kind of property can be bought?
The property can be a new build or an older property, provided it is valued at under Β£600,000.
What is the guaranteed element of the Scheme?
This applies to the lender. As the mortgage loan is higher than many lenders have offered in recent times, and therefore a higher risk to them, the government is offering a guarantee to cover part of the mortgage loan should it not be repaid, in full, by the borrower.
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