The announcement of a temporary stamp duty holiday on the first £500,000 of all property in England and Northern Ireland has been done in an attempt to boost the economy, but what will this mean for many people either considering buying or in the process of buying.
Stamp Duty in England and Northern Ireland is a tax that paid on the purchase of a property. The amount payable will be dependant on the value of the property you are buying, as well as other factors.
How much is paid and by who?
Prior to the Chancellor’s announcement, Stamp Duty was paid on property and land with a value of £125,000 or more. First-time buyers however benefited from no tax on properties up to £300,000, and 5% of the property value between £300,000 to £500,000.
If you are not a first-time buyer however, there are stepped bands for how much is to be paid:
- 2% on property valued between £125,001 to £250,000
- 5% on property valued between £250,001 to £925,000
- 10% on property valued between £925,001 to £1.5m
- 12% on property valued above £1.5m.
There is also a surcharge for landlords or those purchasing a second home, which is currently 3%.
What is the Stamp Duty holiday?
Properties purchased between 8th July 2020 and 31st March 2021 will benefit from the lower Stamp Duty threshold being increased to £500,000. This means that anyone purchasing a property under this amount will pay no stamp duty*, any property valued above this amount will be subject to the same Stamp Duty rates that were previously in place.
This is good news for many and will hopefully encourage those previously unable to raise the capital for the stamp duty, to jump onto the property market.
A person purchasing a property at the average UK house price of £234,000, will now save £2,180. A person purchasing a property at £450,000 will now save £12,500.
With big savings to be made, even for those purchasing a second property, it may be tempting for many to take advantage and embark on purchasing a new property.
If you would like to speak to one of our expert Conveyancing solicitors ring us on 0333 305 5189 or email us at enquiries@lpropertylawyers.co.uk.
*Landlords and people purchasing a property that is not their main residence, will still be required to pay the 3% surcharge.
