Make your move before the Stamp Duty holiday ends
The Stamp Duty threshold lowers from £175,000 to £125,000 in January 2010. Buy your property before then and you could save up to £1,750.
In order to take advantage of the Stamp Duty holiday, the date of entry must be before 1st January 2010. With most solicitors closed between Christmas and new year, time is fast running out….
Contact your solicitor now for more details or email us.
What has the Stamp Duty holiday meant to the market place?
Introduced by the Government in September 2008, the Stamp Duty holiday saw all property sales under £175,000 become exempt from the tax. Buyers of properties between £125,000 and £175,000 were able to avoid the 1% charge – a saving of between £1,250 and £1,750.
Despite the potential savings available the impact of the Stamp Duty holiday was initially low. The incentive of avoiding the tax was insufficient to overcome a lack of confidence among buyers who were concerned about falling house prices and job security.
Buyers realise benefits
Since the turn of the year though, house prices have stabilised and there are signs that confidence is returning to the market. As sales have risen we have started to see more buyers benefiting from the tax relief. Many first-time buyers who would otherwise have been unable to secure funding were able to take the money saved and put it towards a deposit to get a good mortgage deal. Similarly, those moving house gained a bit of extra legroom by not having to pay the tax.
The savings for buyers have been significant. Through the first eight months of the year, around 1,300 properties sold by ESPC would have been exempt from Stamp Duty at the old threshold of £125,000. Over 2,500 properties have sold for under £175,000 though, meaning an additional 1,200 buyers in the East Central Scotland netted total savings of over £1.8m.
Market preparing for festive flurry
So as Stamp Duty prepares to return from its holiday are we heading towards a further pick up in the market at the end of the year as buyers look to avoid the tax? It certainly looks probable as David Marshall, business analyst with ESPC, explains:
“Buyers returning to the market this year are understandably more cost-conscious than they were before the credit crunch, so the potential to save almost £2,000 will certainly be enticing to those who are active in the market. We can probably expect to see a number of buyers act before the end of the year who otherwise may have waited, and those who are in negotiations with a seller will obviously be motivated to see the sale completed before the New Year even if that means paying the seller slightly more."
Expanding on this Steve Spence, senior partner of ESPC member firm Neilsons, said: "We picked up on our radar some weeks ago signs that prices were bottoming out and this has resulted in an increase in activity from those who have been waiting for the market to turn. Closing dates are once again a feature of the market as competition develops for good quality property. With the stamp duty holiday coming to an end, prospective buyers in the price range £125,000 to £175,000 should be looking to make a move now to avoid having to offer in an increasingly competitive market and avoid the additional cost of unnecessary stamp duty."