In his summer economic update on Wednesday, the Chancellor Rishi Sunak announced a temporary cut to stamp duty to help get the housing market back on its feet after months of struggle caused by Coronavirus.
He raised the threshold for paying tax on a home in England and Northern Ireland from £125,000 to £500,000. The move is effective immediately and will run until 31 March 2020.
Sunak said the country needs the housing market to be “thriving” and people need to be “confident” about the market.
He says: “Nine out 10 will pay no stamp duty at all.”
Prior to the announcement, first-time buyers were exempt from paying the tax on homes worth up to £300,000, but those who have previously owned property had to pay a rate of 2 per cent on homes over £125,000. This increased to 5 per cent for homes worth between £250,001 and £500,000, with the higher charge made against the portion of the property above the £250,000 threshold.
In addition, the Chancellor also revealed a £2bn Green Homes grant scheme for energy-saving home improvements.
Vouchers of up to £5,000 will be given to homeowners for insulation as part of a wider £3bn plan to cut carbon emissions. Poorer households will be able to receive higher grants of up to £10,000 when the scheme goes live in September.
Homeowners will be able to spend the cash on loft, wall and floor insulation,eco-friendly boilers, heat pumps, double or triple-glazed windows, low-energy lighting and energy-efficient doors.
The scheme will go live in September and, according to Treasury estimates, will save families up to £600 a year on energy bills.
The Treasury is estimating at least 100,000 jobs will be supported by the investment.