Can’t get away on a foreign holiday?
Have a Stamp Duty Holiday instead!
If you’ve been thinking about buying or selling a property over the past few months, the news that the Chancellor is giving the hated Stamp Duty a well-earned break will be music to your ears!
If you haven’t already completed, you’re a winner!
If you haven’t already completed your purchase or sale, this genuinely is great news, and will save lots of people thousands of pounds.
The ‘holiday’ period started on 8th July 2020 and is set to run until 31 March 2021 and applies to the first £500,000 on any purchase in England and Northern Ireland (subject to some conditions – see below).
So, during that period, you’ll pay no Stamp Duty on purchases up to half a million pounds in value, and a reduced rate, saving a whopping £15,000 on most purchases of more expensive properties.
At Compass Residential, we are ready and able to answer any questions you might have about Stamp Duty or any other property-related matters, and to help you take advantage of this exciting opportunity.
For Property Sellers
For vendors, this should ignite the marketplace, encouraging lots more potential buyers during this unprecedented window, and that may result in an upward pressure on prices as competition for housing stock is boosted. That said, with the recent fall in value generally as a result of the Covid-19 outbreak and the likelihood that many more properties will now come onto the market, don’t expect any massive spikes in the value of your property.
For Home Buyers
For individual home buyers, this could save you many thousands of pounds,
enabling you to upgrade to a higher value property, or now be able to afford that designer kitchen/bathroom/garden/mancave/car/facelift you always dreamed of! It will also mean that you could put down a higher deposit thus possibly getting you a better mortgage rate!!
The amount you will save depends on the value of the property you are buying.
Assuming this is not your first house purchase, and this will be your main residence, the rates for Stamp Duty Land Tax (SDLT) – to give it its official title – for purchases in England/NI will be as follows:
- During the holiday period, there will be no SDLT to pay on properties valued at £500,000 or less.
- The next portion of the property's price (£500,001 to £925,000) will be taxed at 5%, and the £575,000 after that (£925,001 to £1.5 million) will be taxed at 10%
- The remaining amount (over £1.5 million) will be taxed at 12%.
So, for example, the amount of SDLT tax you might save are:
Property value Old rate New rate Saving
£100,000 0 0 0
£200,000 £1,500 0 £1,500
£300,000 £5,000 0 £5,000
£400,000 £10,000 0 £10,000
£500,000 £15,000 0 £15,000
£600,000 £20,000 £5,000 £15,000
£700,000 £25,000 £10,000 £15,000
£800,000 £30,000 £15,000 £15,000
£900,000 £35,000 £20,000 £15,000
£1,000,000 £43,750 £28,750 £15,000
£1,200,000 £63,750 £48,750 £15,000
The rules are different for first-time buyers and landlords, and for those buying additional properties, non-residential properties or leasehold properties, but you can calculate how much you are liable to pay using the government SDLT calculator which can be found at https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro
According to the Chancellor, the average Stamp Duty liability will fall by £4,500, and almost 90% of people purchasing their main home this year will pay nothing at all.
If you have exchanged contracts but have not completed
The good news is that SDLT is payable on completion of the purchase, so if you have not reached that point yet, you will not have to pay the tax. Time to celebrate a welcome windfall!
For Property Investors
The rules are different for the amount of SDLT payable by anyone buying properties in addition to their main residence, and full details can be found at https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro
Here at Compass Residential, we have decades of experience in all aspects of home buying, selling, renting and property investing.
So, whether you’re a vendor, a prospective purchaser, a landlord, tenant or investor, come and talk to us for the latest news, and free, professional, unbiased, friendly advice from your local experts.