Martin Lewis has made a career out of his financial expertise and diligence and as such, he is many people’s first port of call for advice. This evening, he turned his expertise to the new stamp duty rules issued by Rishi Sunak.
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“Stamp duty… was in the chancellor’s statement yesterday,” he explained.
“There’s this temporary cut until the end of March 2021.
“Now what you would have heard about of course, is that from yesterday you don’t pay stamp duty on any property purchase up to £500,000.
“It was £125,000 before so this is a huge intervention and people have been talking about that saving.”
Martin went on to examine some of the confusion that’s out there: “Lots of people misunderstand stamp duty because the way it works changed a couple of years ago.
So those are the thresholds, the key thing to understand, is let’s say you’re buying a house for £600,000.
“You don’t pay 5 percent on the whole amount, that’s how it used to work, you pay 5 percent on the amount above £500,000.”
The Money Saving Expert went on to calculate how this would affect people paying different amounts.
He also explained how the new rules affect those purchasing second homes: “[It’s] worth noting if you’re buying a second house or an additional property, there’s an extra 3 percent stamp duty at every level, including from zero pounds.
So, if it’s a £100,000 property you’re buying and it’s a second home you’ll still pay 3 percent on that.
Rishi Sunak made a number of announcements yesterday with the stamp duty update being the most prevalent.
As he confirmed in parliament: “We need people feeling confident – confident to buy, sell, renovate, move and improve.
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“That will drive growth. That will create jobs.
“So to catalyse the housing market and boost confidence, I have decided today to cut stamp duty.
“Right now, there is no stamp duty on transactions below £125,000.
“Today, I am increasing the threshold to half a million pounds.
“This will be a temporary cut running until 31st March next year.
“And, as is always the case, these changes to stamp duty will take effect immediately.
“The average stamp duty bill will fall by £4,500.
“And nearly nine out of ten people buying a main home this year, will pay no stamp duty at all.”
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