The Government has announced adjustments to the Stamp Duty Land Tax (Stamp Duty) payable upon completion of a purchase.
WHAT IS STAMP DUTY?
Stamp Duty is a tax paid by buyers, which is due within 14 days after completion of the purchase of a property. Stamp Duty is paid in brackets as opposed to being a single percentage payable for the total value of a property.
In the past, Stamp Duty has been adjusted to offer benefits to first-time buyers, however, the recent changes will benefit all buyers in the market.
WHAT CHANGES HAVE BEEN ANNOUNCED?
The Government has announced a Stamp Duty break commencing on 8th July 2020 and running until 31st March 2021. This break will see the minimum threshold for paying Stamp Duty raised from the current threshold of £125,000 to £500,000.
This new rate applies to all buyers, including those who are purchasing a second home or buy-to-let property. You can use our stamp duty calculator to work out how your purchase may be affected.
Stamp Duty for properties over £500,000, and for second homes or buy-to-let properties, is still payable.
WHAT DOES THIS MEAN FOR BUYERS?
The new Stamp Duty reduction will enable many buyers to step onto the property ladder without needing to factor in the cost of Stamp Duty, potentially allowing for significant savings.
Here are some examples as to how Stamp Duty will now look with the new changes in place.
If you were to buy any property up to £500,000 you would pay no Stamp Duty at all.
If you were to buy a property at £750,000 you would pay £12,500 - 5% of the purchase price above £500,000 and below £925,000.
If you were to buy a property at £1.5m you would pay £78,750 – 5% of the purchase price above £500,000 and below £925,000, plus 8% of the purchase price above £925,000 and below £1,500,000.01
If you are looking to buy a second property you will still pay the surcharge on the total price of the property, as well as Stamp Duty.