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Property industry news: Chancellor announces stamp duty holiday

Property industry news: Chancellor announces stamp duty holiday 8 Jul 2020

The Chancellor, Rishi Sunak, has provided a welcome boost to the property industry today, with the announcement of a stamp duty holiday in order to stimulate the property market post-lockdown.

For six months starting on the 8th July 2020, until the 31st March 2021, the threshold for stamp duty has been raised from £125,000 to £500,000.

We’ve put together this post so you can find out exactly what that means for you.

What is stamp duty?

Stamp duty is a tax paid by people purchasing land or property across the UK, although there are three things which have an affect on how much you pay:

  • Where in the UK it is
  • The price paid
  • Whether the buyer has owned property before

The announcement today applies to England and Northern Ireland, and could save buyers up to £15,000 provided they complete on their purchase in the six month window between 8/7/20 and 31/3/21.

How does this affect...

first time buyers?

Usually first time buyers pay no tax up to the value of £300,000 and then 5% on anything between £300,000 and £500,000.

So if a first time buyer was buying a property for £500,000 it would cost them £10,000 in stamp duty.

Under the chancellor’s scheme, the same buyer won’t need to pay any stamp duty provided they aren’t paying more than £500,000 for the property and they complete before the deadline on the 31st March 2021.

people looking to buy-to-let, or buy a second home?

In England and Northern Ireland, buyers who are purchasing a second property or who are buying to let are usually subject to an extra 3% stamp duty.

Under the chancellor’s plans, they will benefit from the stamp duty holiday up to £500,000, but they will still need to pay the 3% extra duty on the entire price of the property they’re purchasing.

buyers who have bought property previously?

For people who have purchased property before, stamp duty usually applies as follows:

  • 2% on properties sold for £15,0001-£250,000
  • 5% on £250,001 – £925,000
  • 10% on £925,001-£1.5m
  • 12% on £1.5m+

Someone spending £248,000 to move home – the average cost of a home in the UK – would have previously paid £2460. However under the chancellor’s announcement as the value of the property is below £500,000 they wouldn’t need to pay anything in tax, provided the sale is completed between 8th July 2020 and 31st March 2021.

We're here to help

If you're a first time buyer, you might also like our guide to purchasing a property in London.

Read our guide:

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