As per the new law, properties over £500,000 will pay stamp duty, however the rising of the nil rate band means they will pay £15,000 less than before
Britain has raised the threshold at which people start paying stamp duty for residential property from £125,000 to £500,000 ($157,054 to $628,215).
The change, effective immediately, is a temporary measure designed to boost the housing market and the measure will remain in place until March 31, 2021 next year, said the UK Chancellor Rishi Sunak.
As per the new law, properties over £500,000 will pay stamp duty, however the rising of the nil rate band means they will pay £15,000 less than before.
This will certainly be a welcome news to Middle Eastern property investors that are synonymous with UK property investment, particularly in and around London, according to real estate expert Knight Frank Middle East.
The UK Chancellor pointed out that the government had pressed ahead with this decision in order to stimulate more deals in the market, encourage people to move home and support jobs, both nationally across the UK, but also from global real estate purchasers.
Henry Faun, a partner at Knight Frank Middle East, said: The announcement will provide a welcome boost to property transactions across the UK property market.
Interest and activity levels from Middle Eastern parties in the UK has recently seen an upsurge and the recent SDLT changes will make the buying of build complete property that much more attractive in the coming months, he stated.
Middle Eastern purchasers who may already be liable for the second home, higher rate additional 3% stamp duty, will still be required to pay the surcharge on the full property value, though they too will benefit from the raised nil rate band, he added.
According to Faun, moving house has a multiplier effect on the wider economy to the benefit of businesses of all sizes.
Gulf-based clients already benefit from an attractive exchange rate, this will add an additional lift to their buying ability in the UK, he stated.
This recent stamp duty announcement comes off the back of news that the number of offers accepted by sellers hit a record level in June, in a further sign that traction has returned to UK property markets since the lockdown was lifted, said Knight Frank Middle East.
The figure was 46% higher than the second highest month on record, which was March this year, underlining how the property market has picked up where it left off before the Coronavirus pandemic struck, it added.
Tom Bill, head of UK residential research at Knight Frank, said a large number of buyers registered their interest after an eight-week lockdown but what’s happening is bigger than that.
Sellers are coming back in meaningful numbers and deals are being agreed at record rates. You can question how long it will last but right now the market is as robust as it has been in years, stated Bill.
As well as a record number of offers accepted, June was also the second highest month on record for new instructions to sell, underlining how the recovery is not purely demand-led. It was the tenth highest month for new prospective buyers, according to Knight Frank.
This was one place below January 2020, which benefited from a bounce in demand following the election of a majority government in December, it added.
