Chancellor Rishi Sunak announced in the summer budget a stamp duty holiday for anyone completing a property purchase in England and Northern Ireland from 8th July 2020 until 31st March 2021. The unprecedented move is hoped to boost the housing market which has struggled to maintain momentum during the coronavirus pandemic.
What is stamp duty?
Stamp duty is a tax you have to pay when you purchase a property or piece of land in England and Northern Ireland. Before the chancellor’s announcement, you didn’t have to pay stamp duty if the transaction cost £125,000 or less, or you were a first-time buyer purchasing a property up to £300,000. However, under the temporary new rules, the stamp duty threshold has been raised significantly to £500,000 and applies to anyone, not just first-time buyers.
Those buying second homes will also be able to benefit from the revised tax rules but will have to pay an additional 3% stamp duty.
Will high-value home buyers benefit from the stamp duty holiday?
For property purchases over £500,000, the amount of stamp duty you’ll have to pay will depend on how much you’re buying the home for. Stamp duty on high value homes is calculated in bands, which increase in relation to how much a property is worth. The stamp duty rate only applies to the part of the property price that falls in each band.
Under the new measures, the bands have been revised, as detailed below.
|Property Value||Stamp Duty Rate|
|Up to £500,000||0%|
|£500,001 – £925,000||5%|
|£925,001 – £1.5million||10%|
|Above £1.5 million||12%|
Good news for home buyers
The stamp duty holiday will help all buyers save a significant amount of money, whether they’re buying their very first home, stepping up the property ladder or downsizing. It’s thought that on average, the stamp duty holiday will help buyers save £4,500, but the savings can be up to £15,000, and nine out of ten buyers this year won’t have to pay any tax on their property purchase at all.
As stamp duty is payable on completion of the purchase, if you have already exchanged contracts but not yet completed, you will benefit from the new scheme and find yourself with some spare cash to spend on your new home.
If you’re looking to take advantage of the stamp duty holiday, get in touch with Chimneypots estate agents today on 01489 584298. Our experienced estate agents are here to help you find your dream property, which has never been so in reach!