Upfront costs when buying a home

Until now, in England and Northern Ireland, stamp duty has been paid on land or property sold for £125,000 or more. There are different rates and systems in Scotland and Wales.

Buyers usually pay their duty based on the price on the day the sale is completed, and they have to give the money to HM Revenue and Customs within 14 days. Now, the chancellor has said this threshold in England and Northern Ireland will increase - with immediate effect - to £500,000 until 31 March.

He said that, on average, people buying a home would save £4,500. Current homeowners moving on could see a saving of up to £14,999.

The housing market, as with the rest of the economy, has been hit hard by the coronavirus pandemic. The lockdown meant activity slowed sharply, with sales at half the levels of a year earlier.

The idea is that housing chains will get moving again, as people make the most of the stamp duty holiday. That would be good for everyone on that chain, and for the UK economy as a whole (of which the housing sector is a key part).

Yet, back in 2012, the then-chancellor George Osborne said a stamp duty holiday had been ineffective in helping people to buy a home when he cancelled a similar scheme.

There is also a limit on how much first-time buyers would benefit from this.

Stamp duty holiday: How will it work?

Some 16% of sales in England were not liable for stamp duty, even before now. Many would be first-time buyers.

Before the chancellor's announcement, first-time buyers paid no tax on properties up to £300,000 and 5% on any portion between £300,000 and £500,000. So the new stamp duty holiday would not benefit many of those young, new buyers directly.

Those buying homes for more than £500,000, or second homes, will still have to pay stamp duty, but their total bill will be lower as a result of these changes