25th March 2021
On Wednesday 3rd March, Chancellor Rishi Sunak delivered the Spring Budget, which stated the property industry will continue to receive direct support from the government for at least the next four months through the Stamp Duty Holiday and Help to Buy scheme.
Stamp Duty Land Tax
What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is a tax paid when purchasing property or land in England that has a value of over £125,000 (or £300,00 for first-time buyers).
What is the Stamp Duty Holiday and when will it end?
Initially introduced by the Chancellor in July 2020, the Government increased the threshold on properties exempt from Stamp Duty fees to £500,000, meaning buyers could save up to £15,000 on their property purchase, which was due to end on 31st March 2021. However, a rise in demand in property purchases has caused delays in the buying process putting many sales at risk of falling through.
Fortunately, The Chancellor revealed some great news in the Spring Budget with a three-month extension to the Stamp Duty Holiday providing relief for both buyers and sellers. The government also announced a transitioning period between the new end date of the stamp duty holiday on 30th June 2021 and reinstating normal stamp duty rates by 1st October 2021, whereby the stamp duty threshold will be £250,000.
We still have luxury apartments available for sale at our Richardson Mews development. If you are interested in purchasing a new home in one of London’s most sought after village locations, you still have time to purchase and receive a stamp duty benefit before normal stamp duty resumes on 1st October 2021. Get in touch today to avoid missing out on potential savings.
London Help to Buy: Equity Loan Scheme
What is the Help to Buy: Equity Loan scheme?
The Help to Buy: Equity Loan scheme allowed first-time buyers access to a government loan for up to 40% (London only) of the value of a new-build home with a maximum value of £600,000 (London only). The equity loan, the deposit you have saved, and your repayment mortgage cover the total cost of buying your newly built home.
Initially, the legal completion deadline for purchases made with this scheme was 31st March, however, it was announced in the Spring Budget that the scheme will be extended by 2 months with a new end date of 31st May 2021. The construction industry has experienced considerable Covid-related delays; this extension is to allow developers time to complete their projects ahead of the deadline.
How will Help to Buy change in 2021?
Once the Help to Buy: Equity Loan Scheme ends on 31st May it will be replaced by a new initiative called the Mortgage Guarantee Scheme. The new scheme will start on the 1st of April 2021 and will allow first-time buyers and existing homeowners to purchase new homes worth up to £600,000 with a deposit of just 5%.
To find out more about how the mortgage guarantee scheme could help you secure your dream home please contact your mortgage advisor or visit https://www.helptobuy.gov.uk/