Investors buying homes worth up to £500,000 won’t have to pay stamp duty on these purchases until the end of March 2021, Chancellor Rishi Sunak has announced.
That said, the extra 3% stamp duty surcharge on second and buy-to-let homes still applies, according to a later announcement from the Treasury. There was also no suggestion that the 2% surcharge on overseas investors, earmarked for introduction in April 2021, will be scrapped or delayed.
Under the new rules, designed to kickstart the housing market, the stamp duty holiday on homes selling for £500,000 or less will last until the end of March next year, with the threshold for ‘no stamp duty’ rising with immediate effect from £125,000 to £500,000.
According to Sunak, this will mean that nine out of 10 main homes sold between now and the end of March will be exempt from stamp duty.
The Chancellor’s announcement regarding stamp duty corresponds only to England and Northern Ireland, although the devolved administrations in Scotland and Wales – who set their own equivalent forms of stamp duty – are expected to follow suit. Typically, when it comes to big stamp duty announcements, the Scottish and Welsh governments fall in line fairly quickly.
In Scotland, Land and Buildings Transaction Tax is the stamp duty equivalent set by the Scottish Government, while in Wales buyers must pay Land Transaction Tax, levied by the Welsh Government.
Green homes and a furlough extension
As was widely expected, given it had been heavily trailed in the media beforehand, Sunak also unveiled the government's £2 billion Green Homes Grant scheme in his speech to the Commons on Wednesday.
The scheme will enable homeowners and landlords in England to apply for vouchers from September, to help pay for green improvements such as loft, wall and floor insulation.
Sunak said the government will fund two thirds of the cost of green improvements up to £5,000 per household and the full cost up to £10,000 for low-income households.
The Chancellor insisted that the vouchers could help save some households £300 a year on their energy bills while also creating many new jobs.
The Green Homes Grant initiative forms part of a wider £3 billion green investment package that the government hopes will support approximately 140,000 green jobs as well as reducing emissions and upgrading buildings that don’t currently perform so well on energy efficiency.
Alongside the £2 billion Green Homes Grant scheme, another £1 billion will be made available for a programme to make public buildings, including schools and hospitals, greener to help the country meet its ambitions of achieving net zero carbon emissions by 2050.
Ben Beadle, chief executive of the National Residential Landlords Association (NRLA), commented: “Improving the energy efficiency of rental housing is good news for tenants, landlords and local economies. We encourage all landlords to make use of this as it will mean housing standards are improved, tenants will save money and it will reduce carbon emissions across the whole sector.”
Sunak dedicated the first part of his speech to confirming that the existing Job Retention Scheme, which has supported some nine million furloughed workers since March, will be wound down between August and October. But firms will receive a new Jobs Retention Bonus where they retain previously furloughed staff in work until the end of January 2021, with a bonus of £1,000 per employee.
Additionally, there will be a bonus scheme for companies hiring apprentices aged 25 and over.
Sunak admitted to MPs that the UK faces ‘profound challenges’ in dealing with the economic fallout of coronavirus, which is expected to hit Britain harder than most because of its status as a largely services-led economy, where household spending and consumption is so vital.
But he insisted that although hardship lies ahead, ‘no-one will be left without hope’.
Sunak said there will be a full-scale Budget, more wide-ranging than Wednesday’s announcement, in the autumn.