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Stamp Duty Relief helps get the property market moving
In an effort to jumpstart the property market following the Coronavirus pandemic, the UK Government has announced new rates of stamp duty for homebuyers in England and Northern Ireland, which will be in place from the 8th July 2020 until the 31st March 2021 – and it’s great news for all buyers! The rates apply whether you are buying your first home or if you have owned a property before.
If you are planning on buying a new property, you will only start to pay stamp duty if your property costs more than £500,000. And if you exchanged contracts before the 8th July but hadn’t yet completed, you should feel a little like you have won the lottery.
The Treasury says nine out of 10 people getting on or moving up the property ladder (or downsizing) will pay no stamp duty as a result of the changes and that the average saving will be £4,500. The amount you will save depends on the cost of your property but will be a welcome relief to many who are looking to move in the coming months.
What are the new stamp duty rates?
For those buying a property that costs more than £500,000, the new stamp duty rates are in effect now. You will pay no stamp duty for properties under £500,000. As the price rises, you will only pay 5% stamp duty on the next £425,000 so properties that cost £500,001 to £925,000. For those that cost from £925,001 to £1.5 million you will pay 10%. For properties that are anything above £1.5 million, you will pay 12% on the remaining amount.
There are also new higher rates for those buying additional properties. For properties up to £500,000, you will pay 3%, then 8% for the next £425,000 (from £500,001 to £925,000) and 13% on the next £575,000 (for properties that cost up to 1.5 million). For properties over this amount, there is a 15% stamp duty rate.
On the 1 April 2021, the reduced rates will revert to the stamp duty rates that were in place prior to 8 July 2020.
In Scotland and Wales, there is a different system where you pay land and buildings transaction tax in Scotland, and land transaction tax in Wales. There were no updates in the Government announcement so it is uncertain whether there will be any changes.
But for those, in England and Northern Ireland who have itchy feet and have decided a new home is on the cards, there is an incentive to encourage you to get moving – literally!
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