On 8 July the Chancellor announced a stamp duty holiday to last until 31 March 2021. This means that the tax level that is charged when property purchasers buy their next home has been raised to £500,000. The introduction of this will help buyers save 1000s of pounds when purchasing their next home. This will provide additional help to people that will have already taken a financial hit because of coronavirus. It will also support the property market to continue its bounce back.
What does this mean:
First time buyers
Before this change first time buyers did not pay stamp duty on the first £300,000, and then had to pay 3% stamp duty on the portion of the property priced £300,000 to £500,000. However, now no buyer will need to pay stamp duty on the first £500,000 – including first time buyers.
Purchasing your next home
Before this change, if you have already owned a property, stamp duty on property and land was applicable over £125,000 (at varying rates in line with the price of the property). However, now the introduction of the stamp duty holiday allows the first £500,000 of your new property purchase to be free of this tax.
Buy To Let
Landlords and investors are also included in the stamp duty holiday which is welcome news. Many people who had been considering letting a property now have more incentive to do so, as well as the increased demand in the lettings market.
Steve Olejnik, managing director of mortgage broker Mortgages for Business, said it was “Those looking to move personal property into a company name because of better tax treatment may have been reluctant to do so because of the stamp duty implications, clearly that cost is lowered now."
A summary of the change in Stamp Duty Rates is included below:
| Property Value |
Old Rate |
New Rate |
| £100,000 |
0 |
0 |
| £200,000 |
£1,500 |
0 |
| £300,000 |
£5,000 |
0 |
| £400,000 |
£10,000 |
0 |
| £500,000 |
£15,000 |
0 |
| £600,000 |
£20,000 |
£5,000 |
| £700,000 |
£25,000 |
£10,000 |
| £800,000 |
£30,000 |
£15,000 |
| £900,000 |
£35,000 |
£20,000 |
| £1,000,000 |
£43,750 |
£28,750 |
