Property was high up on the list of topics for the Chancellor as he delivered his second Budget to an expectant nation on Wednesday 3rd March 2021. Rumours had been circling beforehand as to what Mr Rishi Sunak would announce, especially after a tumultuous 12 months and many temporary fiscal measures already in place.
We have filtered through the pages of reports and micro details to bring you the property-related Budget news that matters. As it stands, buyers, sellers, tenants and landlords have two items of direct importance, as follows:-
Stamp duty holiday extended: this initiative, where zero stamp duty is paid on the first £500,000 of a property purchase, (with a maximum saving of £15,000 per transaction), was due to end on 31st March 2021. The deadline has now been pushed back to later in the year – 30th June 2021.
Completion, not just exchange, must take place before this new June deadline for buyers to qualify for the top-rate discount – as before, stamp duty will only apply to the portion of the purchase that is over £500,000 up until 30th June. There is a ‘step down’ approach to stamp duty discounts after June, with Mr Sunak announcing that from 1st July until 30th September 2021, only the first £250,000 of a property purchase will be stamp-duty free. After that, the stamp duty-free limit resets to the first £125,000 of a property’s value.
5% mortgages for all: it was in October 2020 when the Prime Minister announced that 5% mortgages would be making a comeback – part of Boris’s bid to turn Generation Rent into Generation Buy and to help people move up the property ladder. Unlike open-market mortgages, the Chancellor detailed that these new home loans – accessed with a deposit as low as 5% – would effectively be guaranteed by the Government.
It is also hoped the new mortgages will be offered on a long-term, fixed rate basis for extra financial security. The Chancellor added that many big name lenders were already backing the scheme but clarified that the mortgages would only fund property purchases worth up to £600,000.
What remains unchanged?
Capital Gains Tax rates are unaffected. This tax applies when people sell a valuable asset that has risen in value, and the amount they pay depends on their tax status – basic rate taxpayer or higher rate taxpayer. Assets that fall into this tax remit include most personal possessions (not including a vehicle), some shares, business assets and also any residential property that has been used as a buy-to-let, for business purposes or is very large. For now, the Capital Gains Tax rate stays at 18% for basic rate taxpayers and 28% on any amount above the basic rate.
If you would like help interpreting March 2021’s Budget and what it could mean for your home moving plans, get in touch today. We can help you calculate your stamp duty bill, talk over your mortgage options and show you a list of available properties within your budget.