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Property Stamp Duty Holiday – 08 July 2020

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Temporary Stamp Duty Land Tax holiday for residential buyers

 

Chancellor, Rishi Sunak, has today announced that there will be a temporary ‘holiday’ on stamp duty land tax for the first £500,000 of all property sales for England and Northern Ireland. This holiday comes into immediate effect and will last until 31 March 2021. 

Previously, stamp duty was charged at 0% on the first £125,000 of a property transaction where the property was to be the buyer’s sole property, or 3% if the buyer already owned property. However, from now until 31 March, this £125,000 threshold has been increased to £500,000. 

The previous stamp duty rates were as follows:

PREVIOUS SDLT RATES
Property Purchase Price Single Property Rates Additional Property Rates
£0 to £125,000 0% 3%
£125,0001 to £250,000 2% 5%
£250,001 to £925,000 5% 8%
£925,001 to £1,500,000 10% 13%
£1,500,001 + 12% 15%

New rates look like this:

NEW SDLT RATES
Property Purchase Price Single Property Rates Additional Property Rates
£0 to £500,000 0% 3%
£500,001 to £925,000 5% 8%
£925,001 to £1,500,000 10% 13%
£1,500,001 + 12% 15%

First-time buyers (that qualify for first-time buyers’ relief) previously paid no stamp duty on the first £300,000 of their purchase. They will now pay a lower rate on properties that cost between £300,000 and £500,000.

FIRST-TIME BUYER SDLT RATES
Property Purchase Price PREVIOUS RATES NEW RATES
£0 to £300,000 0% 0%
£300,001 to £500,000 5% 0%
£500,001 to £925,000 5% 5%
£925,001 to £1,500,000 10% 10%
£1,500,001 + 12% 12%

Before these new changes were brought in, the average price paid by a first-time buyer was under £300,000, so this new ‘holiday’ will not affect the majority of first-time buyers. However, there will be a sizeable benefit to those purchasing replacement homes or those adding to their portfolio if the property is over £125,000.

Should you be interested in purchasing or selling your property, now is a great time!

Overseas Buyers

Overseas purchasers looking to invest in property will also benefit from the stamp duty holiday and the first time buyers rates providing they to do not own any property anywhere else in the world.  Purchasers from overseas are not treated differently to UK purchasers.

Buy to Let Buyers

Buy to Let purchasers will also benefit from the stamp duty holiday (based on the single property rate, providing they do not own any other property) and will only pay the additional property rate.

Contact our conveyancing Solicitors

Contact our property lawyers for a no obligation discussion on 0161 820 8888 for Property conveyancers in Manchester or 0208 889 8888 for property conveyancers in London.

Alternatively, please send an email to [email protected] and one of our real estate lawyers shall call you back.

 

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