Chancellor Rishi Sunak announced a temporary cut in the rate of Stamp Duty Land Tax (SDLT) in order to boost confidence in the flagging housing market in his Summer Economic Update.
Property transactions fell by 50% in May this year and house prices have fallen for the first time in eight years. In response, the government will temporarily increase the nil-rate band of residential SDLT in England and Northern Ireland from £125,000 to £500,000. This will apply to purchases from 8 July 2020 until 31 March 2021.
Additionally, the Chancellor announced a £2 billion Green Homes Grant, providing at least £2 for every £1 homeowners and landlords spend to make their homes more energy efficient, up to £5,000 per household. The scheme aims to upgrade over 600,000 homes across England, helping to reduce energy bills and support the green economy.
Eric Leenders, Managing Director of Personal Finance at UK Finance, said:
'The Chancellor's announcement on stamp duty should give a welcome boost to the housing market and in turn have positive knock-on effects for the wider economy.
'This measure designed to re-boot the housing market builds on the wide package of support put in place by mortgage lenders, working with the regulator and HM Treasury, to help customers through these tough times.
'The industry has a clear plan to help homeowners whatever their financial situation and is committed to providing ongoing support to those customers who need it.'
Internet link: GOV.UK publications and UK Finance press release.