Due to the pandemic, the government introduced a stamp duty holiday, effectively scrapping stamp duty on properties worth less than £500,000. But with this now coming to an end, those looking to move will see their costs increase. In this article we outline the changes happening and how you can still save money.
Between July and September 2021, the tax-free threshold will reduce to £250,000, but come October it will return to it’s normal limit of £125,000.
From October, the rate the house-buyers pay will depend on the price and type of property they are looking to purchase.
- First time buyers will not need to pay stamp duty on properties below £300,000
- There’s nothing to pay on properties worth less the £125,000 (but 3% if it’s a second home or buy to let)
- 2% payable on properties worth £125,001 and £250,000 (5% on second homes or buy-to-let)
- 5% payable on properties worth £250,001 and £925,000 (8% on second homes or buy-to-let)
- 10% payable on properties worth £925,001 and £1.5million (13% on second homes or buy-to-let),
According to the Office of National Statistics, the average house cost £248,000 in England in March 2020 (anything more up to date?), so from October, that would equate to £2,460 in stamp duty.
But if you are still looking to move house by the end of the year, there are plenty of other ways to reduce your costs.
Compare estate agents: There’s certainly value in dealing with local estate agents that know the area and can do all the marketing of your property for you, including showing prospective buyers around your house and highlighting all of the features etc. You should however look at the whole package that you’re getting from them, including photography, 360 degree videos/tours – look at some of their existing listings, are the photos nice and bright, are the property descriptions inviting and ultimately, what are their fees. It’s also worthwhile looking at online agents, these can sometimes be more cost effective if you’re willing and able to manage the bookings and show potential buyers around yourself. But make sure they’re listed with Rightmove or Zoopla to gain maximum exposure for your property.
Removal companies: There’s no point moving things to your new home, which you really don’t need. You’ll only end up paying more in removal costs. Make sure that before you move, you completely declutter your home – get rid of anything that you’ve been hanging on to for years. This is a great opportunity to start afresh and save yourself some money in the meantime. Also, enquire about prices by day – Fridays are usually sought-after, but midweek or Sunday’s can be cheaper. And of course, get a few quotes from local removal companies. Alternatively, if you can hire a van and get friends and family to help you, you could save yourself even more money.
Start early: By being organised, you can start collecting empty boxes (especially from those amazon deliveries!) early on. You don’t want to end up having to pay the removal company for additional packing boxes or material. Ask family and friends to save their boxes too or put a message on your local community facebook page. And closer to the moving date, make sure you’ve disassembled larger pieces of furniture so that it’s quicker and easier to move on the day.
Review your utility bills
Moving is a great time to make sure that you’re getting the best deal from all of your service providers. So be sure to shop around and compare prices.
All of these things can add up and cover the cost of the stamp duty you’d need to pay. For example, by using an agent like Tepilo or Purple Bricks (others are available), you could save yourself a pretty penny on marketing your home!!