The UK property market is experiencing a welcome high since the easing of COVID-Lockdown and the Chancellor has capitalised on growing demand by increasing affordability of moving home in the form of a stamp duty holiday.
From 8th July 2020 until 21st March 2021 there will be a temporary stamp duty holiday on the first £500,000 of all property sales in England and Northern Ireland. (This does not affect Scotland and Wales, who are subject to different tax programs.)
So, what does this mean in real terms?
For example, anyone moving home to a property valued at £310,000 will save £5,500 under the stamp duty holiday. Meanwhile, someone moving to a property valued at £500,000 will save £15,000 if they buy the property before the 31 March 2021.
It is estimated that during this tax holiday, the average stamp duty bill will fall by £4,500 and almost nine out of ten people buying a main home this year will pay no stamp duty at all.
What if you’re buying a property over £500,000?
The following shows the rates for higher property values.
Property value: Up to £500,000
Stamp duty rate: Zero
Property value: The next £425,000 (the portion from £500,001 to £925,000)
Stamp duty rate: 5%
Property value: The next £575,000 (the portion from £925,001 to £1.5 million)
Stamp duty rate: 10%
Property value: The remaining amount (the portion above £1.5 million)
Stamp duty rate: 12%
Second homes and buy to let
Under the Chancellor's change, buyers of second homes and buy-to-let properties will also benefit, but will still have to pay the existing 3% extra duty due on the entire price.
In short… it’s a great time to buy!