Martin Lewis has bad news for new homeowners

Martin Lewis had bad news for new homeowners following Rishi Sunak's mini-budget.

A temporary holiday on stamp duty has been announced by the Chancellor as part of a package to dull the economic impact of the coronavirus.

Mr Sunak detailed the Government's plans to aid the country's recovery on Wednesday, with a reduction in stamp duty seen as a way of helping home buyers and housebuilders.

The Government has introduced a temporary increase to the "nil rate" band of stamp duty from £125,000 to £500,000, which applies until March 31 next year.

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Speaking about the change on This Morning, Martin said: "It's interesting that what has been talked about is the gain for people buying smaller properties," he said.

"Actually the biggest gain is those people buying properties above £500,000 because of the way stamp duty works.

"So the way it goes, the first £500,000 of the property nobody pays anything then from £500,000 to £925,000 you pay 5% on that bit.

"Above £925,000 to £1.5m if you're going that high you pay 10% and if you're buying a house over £1.5m you pay 12%."

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He added: "So a bit of maths for you, you bought a home for £600,000, two days ago the stamp duty would have been £20,000, now you're paying 5% of the £100,000 above £500,000 which is £5000.

"So anybody buying a house above £500,000 gets a £15,000 benefit, if you're buying a house below £5000,000 the gain isn't actually as big."

Holly Willoughby then asked Martin: "What about this then, because Ross has said for those buyers who have bought during Covid and helped keep the housing market during those difficult times is there any way they can reclaim their stamp duty they've paid?"

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Martin shook his head and said: "No, I've had this so many times…

"What I should say on that last question is the crystallisation of the stamp duty is completion, so those who have exchanged but not yet completed will get the benefit."

Holly replied: "Sorry Ross."