On Wednesday (8 July 2020), Chancellor Rishi Sunak unveiled a series of measures aimed at helping the economy bounce back post Covid-19.
The measures included an immediate introduction of a Stamp Duty holiday for those purchasing residential property before 31 March 2021.
What were the Stamp Duty tax rules before the announcement?
Prior to Wednesday’s announcement, if you were buying a home costing more than £125,000 and you are not a first-time buyer, then you will have to pay Stamp Duty Land Tax (“SDLT”) on your purchase.
The SDLT rates were as follows:
- £0 – £125,000 = 0%
- £125,001 – £250,000 = 2%
- £250,001 – £925,000 = 5%
- £925,001 – £1.5 million = 10%
- Over £1.5 million = 12%
All purchasers of an additional property had to pay an extra 3% SDLT, on top of the current rates for each band. First-time buyers were exempt from paying SDLT on a property valued up to £300,000 or more but had to pay 5% on anything over £300,000.
What are the new Stamp Duty rules?
As of Wednesday (8 July 2020), anyone (including first-time buyers) purchasing a main property valued at under £500,000 will pay no SDLT on their purchase. If you are purchasing a property over £500,000, you will pay a reduced amount of SDLT.
The new temporary rates are as follows:
- £0 – £500,000 = 0%
- £500,001 – £925,000 = 5%
- £925,001 – £1.5 million = 10%
- Over £1.5 million = 12%
Does this apply to buy-to-let properties or second homes?
If you are buying an investment property or a second home then you will still need to pay the 3% Stamp Duty surcharge. However, the surcharge will be added on to the new temporary rates (above), so buyers will still make a big saving.
What impact will the Stamp Duty holiday have?
Under the new rules, buyers stand to save huge amounts of money. The Government predicts that the average Stamp Duty bill will fall by £4,500, but for those purchasing properties priced at over £500,000, the savings will be around £15,000.
After the property market came to a halt due to Covid-19, it is hoped that the Stamp Duty holiday will get the property market back on track. This measure is likely to encourage more home owners to move, with many people bringing their planned moves forward to take advantage of the measure.
How Blaser Mills Law can help?
Our highly-qualified and experienced team of conveyancing solicitors are able to assist in all property matters, whether you are buying a house, selling your home, investing in a property or embarking upon a move.
Our expert lawyers are able to turn sales and purchases around swiftly, whilst providing a stress-free and straightforward approach to the conveyancing process.
Through the use of our latest cutting-edge software, we can offer 24-hour-a-day online access to your property transaction’s progress. It is this innovative approach, together with our property lawyers’ commitment to being readily contactable, which allows us to provide an outstanding service to our local, national and international clients.
For more information on Stamp Duty Tax, or on Residential Property in general, please contact Alexandra Kirk, Head of Residential Property on 01494 738 064 or at aek@blasermills.co.uk.