The chancellor last week announced a temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland.
The tax threshold has been temporarily raised until 31 March 2021 to boost the property market and help buyers struggling because of the coronavirus crisis.
Residential Property Partner, Alison Treble discusses the changes which came into effect on the 8th July 2020.
What is stamp duty?
Stamp duty is a tax paid by people buying properties. It varies slightly across the UK, in England and Northern Ireland buyers pay Stamp Duty Land Tax. In Scotland it is Land and Buildings Transaction Tax, while in Wales buyers pay Land Transaction Tax.
The changes to stamp duty announced last week will only benefit buyers in England and Northern Ireland.
How much stamp duty will I pay now?
Anyone completing on a main residence costing up to £500,000 between 8 July and 31 March will not pay any stamp duty, while more expensive properties will only be taxed on their value above £500,000.
Property costing between £500,001 and £925,000 will be taxed at 5%, after that £925,001 to £1.5 million will be taxed at 10%, while property over £1.5 million will be taxed at 12%.
Previous Stamp Duty payment
Stamp Duty holiday payment
As these figures above show, house buyers could save as much as £15,000, if they are buying a property of £500,000 or more.
Who is eligible?
Anyone who completes on a property purchase between the 8th July and 31st March 2021 will benefit from the stamp duty holiday and won’t pay any stamp duty provided the property is their main residence, it is located in England or Northern Ireland and costs £500,000 or less.
Landlords and second home buyers are also eligible for the stamp duty holiday but will still have to pay the extra 3% of stamp duty they were charged under the previous rules.
Can I still benefit if I’ve already completed a purchase?
The holiday applies from 8 July, so anyone completing before that date or after the 31st March will unfortunately be liable to pay stamp duty on land or property sold for £125,000 or more and first-time buyers will pay stamp duty on properties over £300,000.
Stamp duty is payable upon completion, so if you’ve exchanged contracts and are currently waiting for completion you will be able to benefit from the holiday.
With saving of up to £15,000 on offer, there has never been a better time to move. So if you have found your dream home, first home or family home get in touch today with our Residential team on 01225 750000 or email Alison.firstname.lastname@example.org and let us help you get moving today.