Has there been a better time to purchase a property since the last recession in 2008?

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The property market has been an exceedingly difficult one to judge this year, with surveyors being very cautious at the start of the year with their valuations, and then hitting the brick wall brought about by the Covid-19 pandemic.

With the slight relaxation by the government in allowing some freedom of movement, and the start of the population returning to the workplace, we have seen a ‘mini boom’ in house prices according to the latest Rightmove statistics.

The wonderful news that HMRC were offering reduced Stamp Duty Land Tax (SDLT), that would apply to residential properties purchased from the 8th of July 2020 until 31/03/2021 inclusive, has injected some real energy into what was becoming a very stagnant marketplace.

The information below is copied from Gov.uk

If you purchase a residential property between 8 July 2020 to 31 March 2021, you only start to pay SDLT on the amount that you pay for the property above £500,000. These rates apply whether you are buying your first home or have owned property before.

You can use the table to work out the SDLT due:

Property or lease premium or transfer value SDLT rate
Up to £500,000 Zero
The next £425,000 (the portion from £500,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%

From 8 July 2020 to 31 March 2021 the special rules for first time buyers are replaced by the reduced rates set out above.

Use the SDLT calculator to work out how much tax you’ll pay.

Higher rates for additional properties

The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.

The following rates apply:

Property or lease premium or transfer value SDLT rate
Up to £500,000 3%
The next £425,000 (the portion from £500,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%

New leasehold sales and transfers

The nil rate band which applies to the ‘net present value’ of any rents payable for residential property is also increased to £500,000 from 8 July 2020 until 31 March 2021.

The following rates will apply:

Net Present Value of any Rent SDLT rate
Up to £500,000 Zero
Over £500,000 1%

Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge.

On the 1 April 2021 the reduced rates shown in the above tables will revert to the rates of SDLT that were in place prior to 8 July 2020.

https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates

 

With the property market in the early stages of recovery, and the added bonus of the Stamp Duty holiday, now is the time to take advantage of a real opportunity of buying below market value in addition to making a real savings with the Stamp Duty temporary reduced rates.

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