Millions saved with stamp duty changes

October 18, 2020 by Brendan O'Neill

Property Market

Analysis by the estate agency Benham and Reeves suggests that those buying a home since the government announced the raising of the stamp duty threshold have saved millions as a result.

The analysis shows that 85% of all home purchases that have taken place since the threshold was raised to £500,000 have been ones where buyers did not have to pay stamp duty. In turn, this has led to total savings for homebuyers of around £108 million. Those not buying a home for the first time still had to pay the second home surcharge of 3% on the transaction.

The threshold above which buyers are eligible to pay stamp duty was raised in July from its previous level of £125,000 for a period of nine months, and Benham and Reeves has claimed that the amount homebuyers could save in total before it returns to its normal level next March could be close to £525 million.

Unsurprisingly, given the cost of properties in the capital, London is the place with the lowest percentage of stamp duty exempt transactions – 48% – but it is also the city where buyers have enjoyed the highest savings, totalling around £25.2 million.

Speaking to FT Adviser, Benham and Reeves director Marc von Grundherr said:

“Of course, it has caused demand to go through the roof and so you could argue that in ‘regular’ market conditions the saving wouldn’t be quite as considerable.”

Mortgage advisors with CeMAP will want to take advantage of this period to complete deals.