As part of the Chancellor’s ‘mini-budget’ announcements, there were two housing-related points raised in a bid to help a housing-led economic recovery.
First of all – SDLT (Stamp Duty Land Tax)
Stamp duty is the tax paid on purchasing properties or land and more specifically this applies to those properties in England and Northern Ireland.
From the 8th July 2020, stamp duty tax will now only apply to land or properties costing over £500,000 and will remain in place until 31st March 2021. To put this into context the previous threshold was properties or land costing £125,000 or more. However, for first-time buyers, they were previously exempt on properties below £300,000 and furthermore paid a reduced rate up to £500,000.
The tax relief will benefit first-time buyers looking to purchase properties over £300,000 and other buyers looking at anything over £125,000. Yet, it’s worth noting that the rules are different for people buying second homes.
Figures from Zoopla suggest that at the moment 16% of sales in England were exempt from stamp duty last year – they reckon that would have been 89% if anything up to £500,000 had been exempt.
Green homes grant
As part of its manifesto from the previous election, the Conservatives pledged £9.2bn for improving the energy efficiency on low-income housing and public buildings towards the UK achieving net-zero carbon emissions by 2050. Well, thanks to their mini-budget announcements Rishi Sunak launched a £2bn grant scheme towards energy-saving home improvements in England.
As part of this, the Chancellor expects 650,000 homes to be upgraded thanks to a £3bn programme to cut carbon emissions. The plan includes offering up to £5,000 insulation vouchers to homeowners. Furthermore, the scheme will help the poorest households which will receive up to £10,000 towards costs.
The Chancellor said he expects the programme to create 140,000 “green” jobs. The suggestion here is to stimulate jobs in refurbishment as well as cutting bills and carbon emissions.
While there is still clearly a way to go to get the UK’s economy on to a positive road to recovery there is still much uncertainty about how this can be achieved. We certainly believe that the housing market can play a pivotal role in the UK’s recovery, as long as the Government continues to support the market.