The Chancellor has announced a stamp duty holiday starting immediately, from the 8th July 2020 through to the 31st March 2021. The threshold before you start paying tax has been increased to £500,000 for everyone.
Whether you’re looking to get on the property ladder, move house, buy a second home, or purchase a Buy To Let, you’re likely to save money. The average saving will be around £4,500, but this could be considerably more for many people.
Let’s take a look at what this announcement means for you, and how much you could save.
First Time Buyers
The previous threshold before stamp duty kicked in was £300,000. So for any property above this price, you’ll save money during this period.
What it was before:
- Tax on the first £300,000 = 0%
- Tax on the next £200,000 (up to £500,000) = 5%
- Properties over £500,000 = You didn’t qualify for First Time Buyer relief and would have paid standard rates (see Moving House below).
What it is now:
- Tax on the first £500,000 = 0%
- Tax on the next £425,000 (up to £925,000) = 5%
- Tax on the next £575,000 (up to £1,500,000) = 10%
- Tax on any amount above £1,500,000 = 12%
How much could you save?
- Properties under £300,000:
You won’t make any savings from this announcement, but you’ll still pay no stamp duty. - Properties above £300,000:
You’ll save money during this stamp duty holiday, see below for examples. - Properties worth £400,000:
You’ll save £5,000. - Properties worth £500,000 or more:
You’ll save £10,000.
Moving House
The previous threshold before stamp duty kicked in was £125,000. So for any property above this price, you’ll save money during this period.
What it was before:
- Tax on the first £125,000 = 0%
- Tax on the next £125,000 (up to £250,000) = 2%
- Tax on the next £675,000 (up to £925,000) = 5%
- Tax on the next £575,000 (up to £1,500,000) = 10%
- Tax on any amount above £1,500,000 = 12%
What it is now:
- Tax on the first £500,000 = 0%
- Tax on the next £425,000 (up to £925,000) = 5%
- Tax on the next £575,000 (up to £1,500,000) = 10%
- Tax on any amount above £1,500,000 = 12%
How much could you save?
- Properties under £125,000:
You won’t make any savings from this announcement, but you’ll still pay no stamp duty. - Properties above £125,000:
You’ll save money during this stamp duty holiday, see below for examples. - Properties worth £400,000:
You’ll save £10,000. - Properties worth £500,000 or more:
You’ll save £15,000.
Second Home or Buy To Let
You can benefit from the stamp duty holiday even if you’re buying a second home or Buy To Let. The 3% surcharge still applies as before, but you can save a considerable amount from the increased stamp duty threshold.
What it was before:
- Tax on the first £125,000 = 3%
- Tax on the next £125,000 (up to £250,000) = 5%
- Tax on the next £675,000 (up to £925,000) = 8%
- Tax on the next £575,000 (up to £1,500,000) = 13%
- Tax on any amount above £1,500,000 = 15%
What it is now:
- Tax on the first £500,000 = 3%
- Tax on the next £425,000 (up to £925,000) = 8%
- Tax on the next £575,000 (up to £1,500,000) = 13%
- Tax on any amount above £1,500,000 = 15%
How much could you save?
- Properties under £125,000:
You won’t make any savings from this announcement, but you’ll still only pay the 3% surcharge. - Properties above £125,000:
You’ll save money during this stamp duty holiday, see below for examples. - Properties worth £400,000:
You’ll save £10,000. - Properties worth £500,000 or more:
You’ll save £15,000.
A Great Time to Buy
Whoever you are, even if you already own a home, you’re likely to save a considerable amount of money if you purchase a property before 31st March 2021.
Due to the coronavirus, many people are reassessing their ideal home or location. But regardless of your reason for moving, now is clearly a great time to act.
Even if your plans to buy were still a while off, you may want to consider bringing them forward. The amount you’ll save could mean you now have enough for a deposit, and the window is more than enough time to find the perfect property and secure a mortgage.
We’re here to help you do just that. We’re a trusted, family-run business, and we’ve been helping our local community for 30 years. It’s free to chat with us and discuss your situation. We’ll then find you the right mortgage and get it sorted for you quickly.
This is your opportunity to save thousands, so don’t miss out!
