The Chancellor, Rishi Sunak, has announced that there will be a temporary change to Stamp Duty rules as of 8 July 2020. The new rules will apply until 31 March 2021 and will help those looking to move and provide a much needed boost to the property market following Brexit and the Coronavirus.
What is stamp duty?
If you buy property, you’ll have to pay Stamp Duty Land Tax (SDLT) on your purchase where it is worth more than £125,000. Previously, the only exception was first time buyers on the first £300,000 of the purchase price
SDLT is a land tax which is calculated on a proportion of the property purchase price falling in different bands and is due on the completion of a land transaction where the ownership is transferred. The tax applies to all residential and non-residential, freehold and leasehold, properties and pieces of land. The tax payable varies on the purchase price as well as the buyers personal circumstances.
For example, if you purchased a £450,000 residential property in June 2020, you would have paid £12,500 in SDLT.
What has changed?
The SDLT threshold was £125,000, but this has now been raised to £500,000 for all buyers and property transactions. This means those purchasing residential and non-residential properties and pieces of land valued at £500,000 or less before 31 March 2021 will not have to pay SDLT.
Buyers of additional residential properties, such as those acquiring second homes or buy-to-let properties, are still liable for the extra 3% in SDLT however will still benefit from a lower SDLT liability overall.
Chancellor Rishi Sunak said: “The average stamp duty bill will fall by £4,500. And nearly nine out of ten people buying a main home this year, will pay no stamp duty at all.”
The new threshold applies from 8 July 2020. If you have already completed on your purchase you will have to pay the full normal stamp duty.
What does this mean for potential buyers?
If you are looking to buy a property, you may wish to proceed now, whilst the Stamp Duty holiday is in place.
Our friendly and helpful Property team would be pleased to assist you with your purchase in light of the new SDLT rates.
Please get in touch with us on 01707 329333, or email email@example.com.