On 8 July Chancellor Rishi Sunak announced a temporary change to the Stamp Duty Land Tax in England as part of the mini-budget that included a range of measures for bolstering the economy as we enter the biggest financial crisis since the Second World War.
In total the measures are part of a £30billion economic stimulus package, and the idea behind the SDLT holiday is to bolster the construction industry. Sunak confirmed that construction contributes £39billion to the economy, providing three quarters of a million jobs, and that confidence is key to activity.
The Stamp Duty relief (for England) results in a temporary increase to the Nil Rate Band of Residential SDLT from £125,000 to £500,000. This temporary cut commences immediately, and run until the end of March.
Industry welcomed the news, especially as it will keep the first time buyer market flowing. Since the easing of lockdown there has been frenetic activity in the property market, in part due to pent up demand. However, this is also due to a lot of people reassessing their living space having been required to stay in for months, with more space and access to the outdoors high on the priority list for many.
Stamp Duty is a tax in need of reform, as in areas with high values, which are extensive these days, it is a charge that hampers activity, restricting both downsizers and upsizers. Government has a tool that you can work out the amount of Stamp Duty due.
Self build and Stamp Duty
SDLT is actually a benefit for most self builders, as the duty is only payable on the land and not on the finished home, so on the face of it this will not make a dramatic difference. However, where it will help is that it will encourage more activity in the market, and any fluidity is always good.
For self builders, Stamp Duty is due on each plot but the rate varies depending on whether your plot is effectively a virgin building plot or already part of the curtilage of a residential property, such as a the garden of a property.
NaCSBA CEO Andrew Baddeley-Chappell commented saying, “It is great news that Government is doing all it can to keep the housing market flowing, as a liquid sales market supports people in their ambitions to move or build from scratch.
“Self builders have always benefitted from a favourable relationship with Stamp Duty, but right now we welcome any measures that keeps builders building and homes coming to market.”
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