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Stamp Duty scrapped on all homes under £500,000 with immediate effect

Date online: 08/07/2020

Stamp duty has been scrapped immediately for all homes under £500,000, to kickstart the stalled housing market.

Rishi Sunak said the move would benefit nine in ten homebuyers – saving £4,500 on the average purchase.

The move was announced as part of the chancellor’s emergency mini-budget to head off a feared explosion in unemployment as the coronavirus pandemic bites harder. 

Mr Sunak said property transactions had fallen by 50 per cent in May – with the first fall in house prices for 8 years.

The solution, he announced was a “temporary cut until 31 March” raising the threshold for paying stamp duty from £125,000 to £500,000, to kick in immediately. 

“Uncertainty abounds in the market – a market we need to be thriving,” Mr Sunak told MPs, adding: “We need people to feel confident.

He added: “The average stamp duty bill will fall by £4,500. And nearly nine out of 10 people buying a main home this year, will pay no stamp duty at all.”

The bill for the stamp duty axe will be £3.8bn, the Treasury said, with further huge costs for the furlough bonus (£9.4bn) and the VAT cut for hospitality (£4.1bn). 

The bill for the stamp duty axe will be £3.8bn, the Treasury said, with further huge costs for the furlough bonus (£9.4bn) and the VAT cut for hospitality (£4.1bn).

The chancellor also hopes the knock-on effects – as new buyers employ decorators and buy furniture – will help keep the economy afloat in the difficult months to come.

Carl Emmerson, deputy director of the Institute for Fiscal Studies, acknowledged the cut would benefit the better off, rather than poorer and younger people who rent.

But he added: “Poor and young people who work in sectors that get stimulated indirectly could benefit.  Posted by https://www.independent.co.uk/news/uk/politics/stamp-duty-cut-rishi-sunak-housing-property-market-update-a9607861.html

 

 

 

 

 

 

 

 

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