Homebuyers will not pay duty on the first £500,000 of any property transaction in England and Northern Ireland until early 2021.

The move was announced as part of efforts to lift Britain’s property market, which had been hit by the impact of the coronavirus pandemic.

The stamp duty holiday is part of a wider package of stimulus measures rolled out by Chancellor Rishi Sunak on Wednesday. 

The limit for paying taxation will be raised to £500,000 until March 31 2021, and with immediate effect. The previous threshold at which stamp duty payments were put into effect stood at £125,000, or £300,000 for first-time buyers, the Financial Times reports.

Mr Sunak said the measure meant that 90% of people purchasing a main home would not have t pay any stamp duty at all, while the average tax bill would be reduced by £4,500. Those buying property above the temporary threshold would be saving £15,000.

“We need people to be feeling confident: confident to buy, sell, renovate, move and improve. That will drive growth, that will create jobs,” the chancellor said. 

The measure does not include property transactions in Scotland and Wales, where administrations are in charge of their respective property taxes. 

Research director at property portal Zoopla Richard Donnell, welcomed the announcement, saying that the benefits of the move would be “immediate” and that they would help “sustain the rebound in housing market activity.”

About the move, head of residential at Knight Frank, Tim Hyatt, said the move was a “very positive step for reigniting the buy-to-let market, which was dying.”

The stamp duty holiday will also be applicable to those buying investment properties.