The Stamp Duty Holiday: Where Does This Leave You?

A month ago, The Chancellor Rishi Sunak confirmed that there would be a major cut in stamp duty in an attempt to boost the housing market following a decline from the coronavirus pandemic. From 8th July and running up until the 31st March 2021, the stamp duty threshold has been temporarily raised from £125,000 to £500,000.

Whether you’re looking to buy a new house and sell yours, or you own a house already, this ‘holiday’ will affect you in one way or another. Here’s how…

What is Stamp Duty?

Stamp duty must be paid if you’re buying a house or piece of land worth £125,000 (now temporarily £500,000) or more in England or Northern Ireland.

Other than first-time buyers who are exempt from paying stamp duty on the first £300,000, stamp duty must be paid on the following rates:

1. Up to £125,000: 0%

2. From £125,001 to £250,000: 2%

3. From £250,001 to £925,000: 5%

4. From £925,001 to £1.5m: 10%

5. Above £1.5m: 12%

The 2020 Changes…

Following on from the holiday announcement, the new rates are…

1. Up to £500,000: 0%

2. From £500,001 to £925,000: 5%

3. From £925,001 to £1.5m: 10%

4. Above £1.5m: 12%

Who Does This Benefit?

The stamp duty holiday will be beneficial for those buying a property from now until 31st March 2021. It will be welcomed by estate agents and developers too, who felt the impact of the coronavirus crisis on the housing market.

The holiday has been mainly been aimed at first-time buyers, however it only really benefits those first-time buyers who are looking to purchase a property in a more expensive area as prior to this holiday, these buyers were exempt from paying stamp duty at all on their first property purchase up to £300,000. For those purchasing their first property at £350,000, there will be a saving of £2,500 with the new changes with this increasing as the property price does.

For current homeowners who are looking to move up the property ladder to a more expensive property, the stamp duty holiday could create some substantial savings. If a homeowner is looking to move to a £400,000 property for example, they will save a huge £10,000 on stamp duty.

If you’re thinking of making the most of the stamp duty holiday, be sure to get in touch with us for our expert advice. Some house purchases can take weeks meaning that those who begin the process in the late Autumn, may find themselves missing out on the savings as it ends in March. Don’t miss out or delay, get in touch with us today.