The Chancellor, Rishi Sunak, has provided the property industry with a welcome boost, announcing a stamp duty holiday in order to stimulate the property market post-lockdown. This involves raising the stamp duty threshold immediately to £500,000 for everyone as long as their sale is completed between the announcement on the 8th July 2020 and the 31st March 2021.
“We welcome the cut in stamp duty and I hope that it leads to a more positive property market in West London. For some buyers the potential savings are up to £14,999 which is fantastic news.Northfields have seen a strong return in sales agreed in June with business returning to normal levels and I expect to see a strong sales market going forward however plans will need to be made for when this exemption ends in March next year.We would therefore encourage anyone selling to instruct a solicitor at the time of first going onto the market to prepare for sale as solicitors may not have the capacity as everyone rushes to complete towards March.”
Northfields CEO, Richard Palfreeman
Stamp duty is tax paid by people purchasing land and properties across the UK, although its amount varies depending on a few factors:
The announcement today applies to England and Northern Ireland, as there are different rules in Wales and Scotland.
In England and Northern Ireland, stamp duty is usually paid on land or property sold for the value of £125,000 or more.
It’s slightly different for first time buyers, with new property owners paying no tax up to the value of £300,000 and then 5% on anything between £300,000 and £500,000.
For people who have purchased property before, stamp duty rates are usually:
Someone spending £248,000 to move home – the average cost of a home in the UK – would have previously paid £2460,00. However under the chancellor’s announcement, as the value of the property is below £500,000 they wouldn’t need to pay anything in tax, provided the sale is completed between 8th July 2020 and 31st March 2021.
In England and Northern Ireland, buyers who are purchasing a second property or are buying to let are usually subject to an extra 3% stamp duty.
Under the chancellor’s plans, they will benefit from the stamp duty holiday, but they will still need to pay the 3% extra duty on the entire price of the property they’re purchasing.