Are you in the market for a purchasing a new home? In this post we discuss how to buy your dream home with 0% stamp duty, an initiative that the government introduced last year to help more people get on the property ladder and support the housing market which had suffered greatly due to the pandemic. Incase you were not familiar with stamp duty, stamp duty (land tax) is a type of tax that the UK government charges on property buyers for properties worth £125,000+ or £300,000 for first time buyers.
Like most people who bought there homes prior to the introduction of the 0% stamp duty fee, I had to pay £3500 for my first home since it was worth more than £300,000. This is not something I honestly had thought about until my lawyer informed me its something I need to pay and everyone pays it. For the first time buyers that are able to purchase a new home, in this post we share some tips on how to buy your dream home with 0% stamp study thanks to the recent initiative due to end 30-June-2021.
Disclosure: This is a collaborative post
How to Buy your Dream Home with 0% Stamp Duty
Saving for a house can be so exciting! Especially if this is your first home, it can feel like a dream come true. Many people dedicate a lot of time to choosing the perfect house. I was one of those people that spent a lot of time (online) looking for my perfect home and when I narrowed my choices down I went to check out each property.. Long hours are spent looking at different properties and picturing the way each room will look in the end. I can not even remember how many hours I spent decorating my home online using various softwares trying to picture how it would actually turn out. It was such an incredible journey and experience which I will treasure for many years to come.
The Stamp Duty Holiday can help reduce the cost of a new home
Luckily for people looking to purchase a home, the government has made it easier to bear the financial burden during the pandemic by introducing the so-called Stamp Duty Holiday. Stamp Duty is a tax that is paid on property purchases.
Not having to pay it can help save money that could be spent on other things instead. For example, it frees up more capital to ensure the essential checks are done on the house. When buying a home, you’ll usually need to factor in things like conveyancing solicitors to help with the legal work. This also applies when selling your home. Of course, it will be easier to spend more on the interior if you have more money available, making sure that your new home will become a sanctuary – instead of a money pit.
Planning for new furniture
When planning the interior of a new house, it can help to not only plan for larger items, but also for the smaller things that make a home a home, such as lamps, chairs, and coffee tables. If you would like to splurge a little bit on comfy lounge chairs or large bookshelves, saving a bit longer or more can make furniture shopping far less stressful. Even that couch that you have your eye on could become a statement piece in your new living room!
Stamp Duty Holiday allows savings of up to £15,000 according to some research. Many people have been able to save a significant amount of money by taking advantage of it.
The deadline is soon
Unfortunately, the tax holiday is coming to an end on 30th June. From July, the Stamp Duty will transition to normal. It will be tapered until the end of September in order to smooth the transition back to the original rates. Since house prices are on the rise, any savings can be beneficial and reduce the stress of moving. In general, the tax only applies to purchases above a certain level. While it used to be mandatory for most properties with a value of £125,000, this was changed to £500,000 after July 2020. The extension of the break from the tax has been quite effective and made more people interested in buying a home, also helping the market.