Since July, the housing market has benefited from the stamp duty holiday but does it apply to limited companies, second homes or buy-to-lets?
First-time buyers of properties worth £500,000 or less were exempt from paying stamp duty and the new rates will remain in place until 31st March 2021. Those purchasing second homes or buy-to-let properties also benefit from the stamp duty holiday.
Property investors who purchase through limited companies will also be exempt up to £500,000, however, the pre-existing 3% surcharge on such purchases will still apply. So, property investors spending less than £500,000 will only need to pay 3% tax on top of the purchase as opposed to the previous 5%.
We believe that the market appears to be doing very well and Rishi Sunak’s stamp duty holiday has prevented any major drop in house prices up to this point. Around 90% of buyers have benefited from the stamp duty holiday with each of them on average saving £4,500 each.
A recent report from Savills has revealed that the housing market continues to have high levels of activity and the government’s stamp duty cut will hold up transaction numbers. For borrowers, we think the base rate will stay the same in the short term and this should keep mortgage rates down. This as well as strong buyer appetite from both within and outside the UK is expected to maintain house price growth.
We are also noticing a high number of clients considering to leave London from a property point of view because their requirements from their home have changed. Post-lockdown has indicated that people are looking for different requirements from their home such as more space to enable working-from-home and a garden to enhance their work-life balance. Individuals are looking to other regions to achieve these conditions.
If you require advice on the stamp duty holiday or a new mortgage, please get in touch.
There is also coverage of a potential market correction once the stamp duty holiday has finished. To give balance, please include this.
Your home maybe repossessed if you do not keep up repayment on your mortgage. The Financial Conduct Authority does not regulate Buy to Let Mortgages.