Stamp Duty Changes: What do they mean for you?
The Chancellor has announced a temporary Stamp Duty Land Tax (SDLT) holiday on residential properties as part of a number of measures that aim to kick start the economy following the impact of COVID-19.
What has changed?
The government has increased the lower stamp duty threshold to £500,000.00 for property sales in England. This means any property purchases below £500,000 will not pay any stamp duty as long as the deal is completed before 31 March 2021.
People buying 2nd home / buy to let properties will also benefit, but will still have to pay the 3% extra duty due on the entire price. The benefit is that they are exempt from the normal rate element.
The measure is anticipated to save every home-buyer between now and 31 March 2021, on average, £4,500 on SDLT. It is also expected that 9 out of 10 people buying a home will pay no SDLT at all.
Therefore, the residential SDLT thresholds as of today to and including 31 March 2021 will be:
· 5% on properties costing £500,001 to £925,000;
· 10% on £925,001 to £1.5 million; and
· 12% on any value above £1.5 million.
The SDLT holiday also applies to purchases of additional properties. However the surcharge remains at the following rates:
· 3% on properties costing up to £500,000;
· 8% on £500,001 to £925,000;
· 13% on £925,001 to £1.5 million; and
· 15% on any value above £1.5 million
Here are a few examples in practise:
Purchase price £250,000 for a normal transaction was £2,500 will now be no stamp duty payable at all.
Purchase price £250,000 for 2nd home / buy to let property was £10,000.00 will now be £7,500.00.
Our head of property, Steven McMaster explained “Ever since the property market opened back up we have seen a huge influx of new instructions with people keen to make up for lost time. With our ability to adapt to the challenging developments of the last few months, having processed transactions for our clients throughout, we are now able to offer client meetings with social distancing in place and our full Conveyancing team are back in our offices dealing with the needs of our clients the news of the SDLT holiday is further positive news in what is clearly a very difficult time.”