Stamp Duty Holiday

Posted by Batcheller Monkhouse on 18th July 2020 -

his week the chancellor has announced a temporary stamp duty holiday on the first £500,000 of all property sales in England and Northern Ireland.

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Shortly after the announcement, Rightmovereleased a statement saying there was a ‘22% uplift in traffic to Rightmove in the fist half  hour following the stamp duty announcement’. So it looks as thought we are set for a busy few months!

The BBC reports: The level at which the tax is charged has been temporarily raised until next March to £500,000 to boost the property market and help buyers struggling because of the coronavirus crisis. The changes have come in with immediate effect.

Usual practice

In England and Northern Ireland stamp duty is paid on land or property sold for £125,000 or more. However, first-time buyers pay no tax up to £300,000 and 5% on any portion between £300,000 and £500,000. For people who have bought a home before, stamp duty rates are 2% on £125,001-£250,000, 5% on £250,001-£925,000, 10% on £925,001-£1.5m, and 12% on any value above £1.5m. That means someone spending £248,000 – the average cost of a house – would currently pay £2,460 in stamp duty to move home. Landlords pay an extra 3% of stamp duty when they purchase a buy-to-let property in England and Northern Ireland.

What has changed

Stamp Duty Cut

The Government has increased the lower stamp duty threshold to £500,000 for property sales in England and Northern Ireland.That means any property purchases below the new level will not need to pay stamp duty as long as the deal is completed before 31 March 2021. People buying second homes and buy-to-let properties will also benefit, but will still have to to pay the 3% extra duty due on the entire price. The move is aimed at helping buyers who have taken a financial hit because of the coronavirus crisis. It is also intended to boost a property market hit by lockdown. Chancellor Rishi Sunak said: “The average stamp duty bill will fall by £4,500. And nearly nine out of 10 people buying a main home this year, will pay no stamp duty at all.”

When the stamp duty holiday will happen

It is effective immediately from Wednesday 9 July 2020 and will last until 31 March next year (2021).