July 30, 2020
The Chancellor, Rishi Sunak, has announced a temporary holiday on stamp duty on properties sold for up to £500,000 in England and Northern Ireland taking effect immediately and lasting until 31st March next year.
Put in place to boost the property market and help buyers struggling because of the coronavirus crisis, the stamp duty holiday is set to benefit nine in 10 homebuyers, saving £4,500 on average. So, what does this mean for you?
What is stamp duty?
Stamp duty is a tax paid by people buying properties. The amount handed to the Government depends on where you are in the UK, and the price of the property.
What do the changes mean?
The Government has temporarily increased the stamp duty threshold from the previous £125,000 to £500,000 for property sales in England and Northern Ireland.
That means, anyone completing on a main residence costing up to £500,000 between 8th July 2020 and 31st March 2021 will not pay any stamp duty, and more expensive properties will only be taxed on their value above that amount.
How much stamp duty will I pay?
If the property purchased is your main home, you won't pay any stamp duty on it if it costs £500,000 or less.
Before the announcement, stamp duty was paid on land or property sold for £125,000 or more, while first-time buyers did not pay any stamp duty up to £300,000. This stamp duty holiday replaces the first-time buyer discount.
Landlords and second home buyers are also eligible for the tax cut but will still have to pay the extra 3% of stamp duty they were charged under the previous rules.
How much could I save?
The average stamp duty bill will fall by £4,500. Before the stamp duty holiday, if you bought a house for £275,000, the stamp duty you'd pay would have been £3,750. That's based on 0% duty on the first £125,000, 2% on the next £125,000 (£2,500), plus 5% on the final £25,000 (£1,250).
The change could save you as much as £15,000, if you’re planning to buy a property of £500,000 or more.
Speaking on the changes, Northstone Sales Manager, Anita Jolley said: “The latest announcement from the Chancellor will help to keep the housing market moving and will help so many people to get a foot on the property ladder. We look forward to announcing our prices for our Silkash homes in the coming weeks and helping people to find their dream homes following what has been a long few months of lockdown in the UK.”