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Stamp Duty Holiday announced to revive and install confidence in the property market

The Chancellor announced on Wednesday 9th July that there will be a temporary stamp duty holiday until 31st March 2021.

Stamp duty is a tax paid by people buying properties and, in England and Northern Ireland, is paid on land or property sold for £125,000 or more.

However, first-time buyers pay no tax up to £300,000 and 5% on any portion between £300,000 and £500,000.

Prior to this announcement stamp duty was payable as follows:

2% on £125,001-£250,000
5% on £250,001-£925,000
10%  on £925,001-£1.5m
12% on any value above £1.5m.

 

With immediate effect homebuyers will be temporarily exempt from paying stamp duty for the first £500,000 of any property price. The starting threshold will be increased to £500,000 on all sales taking place before 31 March 2021. The starting rate above £500,000 will be 5% and will apply to the part of the sale up to £925,000 thereafter the above rates will apply

The holiday is an attempt to revive and install some confidence in the property market and Chancellor Rishi Sunak has suggested the average stamp duty bill will fall by £4,500, with nearly nine out of 10 people buying a main home this year paying no stamp duty at all

The Stamp Duty thresholds have also changed for buyers of second homes or companies buying residential properties.

The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.

The following rates apply:

Up to £500,000 3%
The next £425,000 (the portion from £500,001 to £925,000)  8%
The next £575,000 (the portion from £925,001 to £1.5 million)  13%
The remaining amount (the portion above £1.5 million)    15%

This Link will help calculate the Stamp Duty payable dependant on your circumstances

Jenny Woodruff

Posted:

Jenny Woodruff

Partner

Jenny is a Partner and head of the Residential Conveyancing Team. She has extensive knowledge of the conveyancing process, including: dealing with freehold and leasehold sales & purchases; new build purchases; remortgages; transfers of equity; shared ownership; help to buy transactions & general property advice.