In order to help revive the economy the Chancellor of the Exchequer, Rishi Sunak, has today announced that he has temporarily raised the threshold for paying stamp duty from £125,000.00 to £500,000.00 on residential house purchases in England and Northern Ireland. This news has been announced following concerns that house prices have fallen for the first time in eight years. Stamp duty land tax is a payment made by people buying a property, and is normally payable on properties over £125,000, unless exemptions apply. The payment of Stamp Duty Land Tax is triggered once completion of the purchase has taken place.
Rishi Sunak has announced that the move will benefit nine in ten homebuyers and will save £4500.00 on the average house purchase. The new measure will last until 31 March 2021 but do not apply to landlord’s buying buy-to-let properties.
Prior to this announcement, Stamp Duty was payable on residential properties over £125,000, unless you benefitted from a first-time buyer exemption. Currently, stamp duty is not charged on the first £125,000 of the selling price, with a 2% rate between £125,001 – £250,000, 5% on the next £251,001 – £925,000, 10% on £925,001 – £1.5 million and 12% on any value above £1.5 million.
This means for example that if you purchase a property for £350,000, the stamp duty payable would usually be 0% on the first £125,000, 2% on the second £125,000 (£2500) and 5% on the final £100,000 (£5,000). This means that the Stamp Duty Land Tax payable would be £7500.00 in total. Under the new measures announced today, this would not be payable during the Stamp Duty holiday period, saving the buyer £7500.00 in this example.
These measures are temporary, and as buying and selling a property does not take place overnight, we urge you to take action now if you wish to take advantage of this opportunity. Do not miss the deadline and miss out on a potentially large saving when buying your home. Please contact us on 0121 511 2233 if you are buying or selling a property, where a member of our experienced and helpful team will be able to assist you further. Please also see the ‘Moving House’ section of our website to see the full range of serves that we offer.