In his much-anticipated summer economic statement, the Chancellor Rishi Sunak announced a draft of measures aimed at boosting the UK economy: including a temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland, with immediate effect.
In a move firmly aimed at boosting the property market, the tax threshold has been temporarily raised until 31 March 2021. Stamp duty was previously paid on land or property sold for £125,000 or more.
Hatch Brenner Conveyancing Executive Rachael Hughes commented: “Myself and the Hatch Brenner Residential Property team very much welcome the introduction of the stamp duty holiday. It will give people looking to buy a home confidence, and make it more affordable for people to move house during the current coronavirus pandemic. It is a positive action by the Government to keep the housing market moving. We have seen a steady flow of enquiries from those planning on buying or selling a property – even through lockdown. In particular, since the easing of lockdown, and the relaxation of social distancing to 1m, we have been really busy with lots of new properties entering the housing market as people review their circumstances.”
Stamp Duty Land Tax
Stamp Duty Land Tax (SDLT) is the tax paid in England upon completion by those buying properties and is dependant on the price of the property in question.
From 8 July 2020, anyone completing on a main residence costing up to £500,000 will not have to pay any stamp duty, and any properties costing above £500,000 will only be taxed on their value above that amount. Between £425,000 to £925,000 above £500,000, the stamp duty would be taxed at 5%, and the £575,000 after that (£925,001 to £1.5 million) would be taxed at 10%. Anything remaining over £1.5 million would be taxed at 12%.
According to the BBC News, the stamp duty holiday will cut £4,500 off the average stamp duty bill and save some up to £15,000: Stamp duty holiday: How will it work?
First time buyers
The new stamp duty holiday replaces the previous first time buyer stamp duty discount whereby they previously did not pay stamp duty up to a property value of £300,000.
Landlords and second home buyers
Under the terms of the stamp duty holiday, landlords and second home buyers are eligible for the tax cut, but will still have to pay the additional 3% stamp duty they were previously charged.
Government stamp duty rate calculator
The rates have been adjusted in the Government SDLT calculator which is an easy tool to work out the SDLT payable for most residential property transactions.