Stamp Duty Holiday Announced
As part of the many plans put in place to assist the economy following the coronavirus crisis and to boost the property market, home buyers have been given a welcome temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland.
Chancellor Rishi Sunak told the House of Commons in a special statement at lunchtime on 8 July that he would immediately increase the ‘nil-rate’ band of stamp duty from £125,000 to £500,000.
The ‘stamp duty holiday’ which started immediately and will run until 31 March 2021, could reduce the typical stamp duty bill for a main home from £4,500 to zero, meaning that for nearly 9 out of 10 property transactions these will no longer be subject to stamp duty.
However, due to wide variations in house prices across the UK, the average savings that home buyers in England can typically expect to make from the stamp duty holiday can vary from hundreds of pounds to as much as £15,000, according to calculations from Rightmove.
Here are Rightmove’s estimates for the amounts that buyers could typically save, depending on where they live:
- North East, £646
- Yorkshire and the Humber, £1,550
- North West, £1,638
- East Midlands, £2,222
- West Midlands, £2,262
- South West, £6,100
- East of England, £8,153
- South East, £10,980
- London, £15,000
Chancellor Rishi Sunak said:
“Uncertainty abounds in the market – a market we need to be thriving.
“We need people feeling confident – confident to buy, sell, renovate, move and improve. That will drive growth. That will create jobs.
“So, to catalyse the housing market and boost confidence, I have decided today to cut stamp duty.
“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.”
What are the new stamp duty rates?
The new measures put in place by Sunak will mean that stamp duty will only come into place on property above £500,000 and is for people buying their first home, or moving up or down the housing ladder.
The new stamp duty rates during the holiday are:
- Up to £500,000: 0%
- On the portion from £500,001 to £925,000: 5%
- On the portion from £925,001 to £1.5m: 10%
- Above £1.5m: 12%
For buyers purchasing additional property for £40,000 or more, such as second homes or landlords who purchase a buy-to-let property, these will be subject to pay an extra 3% surcharge of stamp duty on top of the new holiday stamp duty rates, with the 3% being applicable to the entire purchase price of the property. So, for those buying additional homes these will attract a 3% stamp duty bill on the first £500,000 of property.
This will still result in a saving, because of the 3% rate previously applied on the first £125,000, with higher rates above that.
It is worth noting that stamp duty is different if the property or land is in Scotland or Wales.
Residential Conveyancing Solicitors in Portsmouth and Waterlooville
At Larcomes, we have a specialist team of highly experienced residential property solicitors who have the experience and resources to ensure your transaction is carried out as smoothly and cost-effectively as possible.
We recognise that buying or selling your property can be a stressful experience and our goal is to remove the stress through the provision of a friendly and quality responsive service.
If you would like to speak us regarding the new stamp duty holiday or have any other questions concerning residential conveyancing, please contact us today on 023 9244 8100 for our Portsmouth office or 023 9224 6666 for our Waterlooville office for fast, constructive advice that is friendly and local.
Please note that this article is not intended as legal or professional advice. This is a general news article only and updates to the law may have changed since it was published