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Coronavirus recovery plan: how will it affect you?

Chancellor reveals the package of measures designed to boost the economy after Coronavirus

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A temporary change to stamp duty and a £2bn green homes grant were two of the measures announced by Chancellor Rishi Sunak to help kickstart the economy after the Coronavirus crisis. 

Stamp duty holiday

The Chancellor has announced a temporary holiday on stamp duty in England and Northern Ireland.

From now until March 2021, the price at which the tax is charged has been raised to £500,000. It’s hoped this will kickstart sales again where potential buyers have put off plans to move due to the effects of Coronavirus. 

This tax is paid in England and Northern Ireland on land or property sold for £125,000 or more, although first-time buyers pay no stamp duty up to £300,000 and 5% on any amount of the purchase price between £300,000 and £500,000.

If you’re not a first-time buyer, stamp duty rates are: 

  • 2% on £125,001-£250,000 
  • 5% on £250,001-£925,000 
  • 10% on £925,001-£1.5m
  • 12% on anything over £1.5m

This change means someone buying a house for £247,000, the average price around the UK according to ONS, will save £2,440 on stamp duty. 

According to data from Rightmove, the areas outside London that would see the biggest potential savings from the stamp duty holiday are: 

  1. Dorking (Surrey)
  2. Lymington (Hampshire) 
  3. Sunbury-on-Thames (Surrey)

Land transaction tax

The Finance Minister for Wales has also announced that, as of Monday 27 July, the starting threshold for land transaction tax will increase from £180,000 to £250,000. As with the stamp duty holiday in England and Northern Ireland, this is a temporary measure lasting until 31 March 2021.

This change reflects the nature of the Welsh housing market, where the average house price is £162,000, but it won’t apply for any additional house purchases such as second homes or buy to let.

Green Homes Grant

The £2bn Green Homes Grant to help make homes in England more energy efficient was also unveiled as part of a wider £3bn plan to cut emissions. 

The scheme starts in September and will see the government paying at least two-thirds of the cost of energy-saving home improvements such as insulation and double glazing. 

The payment will be made by voucher worth up to £5,000, although lower income households could receive up to £10,000. 

Landlords will also be able to benefit from this grant, with the hope that tenants will eventually see their energy bills decreasing. 

Other measures 

These measures were announced alongside others:

  • Jobs Retention Bonus: £1,000 payment to businesses who bring back furloughed employees 
  • Scheme to get unemployed 16 to 24-year-olds into work
  • New payments for businesses hiring apprentices
  • Temporary VAT cut for businesses in tourism and hospitality
  • Eat Out to Help Out: a discount for people eating at cafes, restaurants and pubs during August

The focus of many of the measures was employment – getting furloughed employees back to work, easing youth unemployment, and improving skills.

VAT will also be cut from 20% to 5% for the hospitality and tourism sectors until mid-January. It’s unclear at this stage how much this will benefit consumers, with many choosing not to visit such attractions while Coronavirus is still a risk. 

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