The Chancellor announced in his summer statement yesterday that the Stamp Duty Land Tax zero rate threshold will increase with immediate effect from £125,000 to £500,000. This cut in Stamp Duty is in response to housing transaction levels falling by 50% in May 2020 and continued uncertainty in the housing market.
Who will benefit from the Stamp Duty Cut?
Stamp Duty is paid by the buyer in a property transaction. Anyone buying a main home in England or Northern Ireland worth up to £500,000 will now pay no Stamp Duty on their purchase. The Chancellor has said that the cut is expected to affect nearly 90% of buyers and save the average buyer around £4,500.
When does the Stamp Duty Cut take effect?
The Stamp Duty cut applies to residential property transactions which complete from 8th July 2020 until 31st March 2021 (inclusive). Those who have already completed prior to 8th July 2020 will not be entitled to a refund of Stamp Duty already properly paid.
On 1st April 2021 the Stamp Duty position for all purchases will return to the rates which were payable prior to 8th July 2020.
What about First Time Buyers?
Since 2017, first time buyers have benefitted from reduced rates of Stamp Duty on purchases up to £500,000. This exemption has now been removed and first time buyers pay the same zero rate up to £500,000 as everyone else.
Second Homes and Additional Dwellings
Individuals and companies buying second homes or additional dwellings pay an additional 3% Stamp Duty over and above the rate for main homes. The good news is that the new cuts will also apply to second homes, although the 3% premium remains.
The New Stamp Duty Rates in Summary
|Property Price (£)||Rate for Main Homes (%)||Rate for Second Homes (%)|
|0 – 500,000||0||3|
|500,001 – 925,000||5||8|
|925,001 – 1,500,000||10||13|
|1,500,001 and above||12||15|
Help with your Property Purchase or Sale
Our expert property law team are here to help with all your Stamp Duty related enquiries. To obtain a conveyancing quote for your property purchase, sale or remortgage please click here to visit our quotation page. Our online quotation system has been updated for the new Stamp Duty rates and will give you an all-inclusive quote for your transaction.
If you would rather speak to one of our friendly team please contact us for help.
The Backhouse Solicitors Team
Tel: 01245 893400
Email: [email protected]
Visit: 17 Duke Street, Chelmsford, Essex CM1 1JU
Or send us a message through the Contact Us page on this website