By Lyndsey Hall
The housing market has been severely affected by the pandemic, with activity and construction both slowing sharply. Moving house also has a multiplier effect on the economy as people tend to spend money decorating and furnishing their new home, with estimates suggesting that doing so drives additional spending worth about 5% of the house value.
It’s crucial to ensure medium-term confidence in the property market and maintain the growing momentum since the easing of lockdown. To do this, the government have temporarily cut Stamp Duty Land Tax for home buyers across England and Northern Ireland until 31 March 2021.
Changes to stamp duty land tax
The Nil Rate Band of Residential SDLT, in England and Northern Ireland, has been increased from £125,000 to £500,000 for property transactions completed between 8 July 2020 and 31 March 2021. The change means that no SDLT will be paid on 90% of property purchases, saving £5,000 on the purchase of a £300,000 house.
Supplementary charges still apply
Note that the 3% supplementary charge for second and subsequent homes in England and Northern Ireland will continue to apply so the 3% rate would apply up to £500,000 purchase price.
Note also that there are different rates of tax on property transactions in Scotland and Wales as such taxes have been devolved in those countries.
Green homes grant
The government will also introduce a new Green Homes Grant which will provide at least £2 for every £1 homeowners and landlords spend to make their homes more energy efficient, up to £5,000 per household.
For those on the lowest incomes, the scheme will fully fund energy efficiency measures of up to £10,000 per household.
This is another measure expected to generate 100,000 additional jobs and will also be vital for meeting our target of net zero greenhouse gas emissions by 2050. The scheme aims to upgrade over 600,000 homes across England, saving households hundreds of pounds per year on their energy bills.