It is not the holiday any of us expected to have this summer but chancellor, Rishi Sunak, announced a stamp duty holiday on 8 July for properties in England and Northern Ireland.
It is hoped that the changes, which will be in place until 31 March 2021 will provide a boost to the property market and make it easier for buyers to purchase a home following the coronavirus crisis.
What is stamp duty?
In England and Northern Ireland, Stamp Duty Land Tax (SDLT) is paid when you buy a property or land over a certain price.
The rate at which the tax is paid depends on the price and type of the property.
The previous threshold was £125,000 for residential properties and £150,000 for non-residential land and properties.
What is the stamp duty holiday?
The government has temporarily increased the stamp duty threshold to £500,000.
This means if you purchase a property worth up to £500,000 between 8 July 2020 and 31 March 2021, you will not pay stamp duty.
How much will I save?
The stamp duty holiday could save buyers up to £15,000, if they purchase a property above £500,000.
- £200,000 property value – £1500 saving
- £300,000 property value – £5000 saving
- £400,000 property value – £10,000 saving
- £500,000 property value – £15,000 saving
Source: HM Revenue and Customs
Will the stamp duty holiday apply to second homes?
If you are buying a second property or a property on a buy-to-let basis, you will still benefit from the increased £500,000 threshold. However, you will have to pay the 3% Stamp Duty surcharge which applies to second homes unless the new home you are buying will be your main residence.
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