Stamp Duty Holiday: Everything you need to knowStamp_Duty_Holiday_Site.jpg

Chancellor Rishi Sunak has announced a stamp duty holiday for property buyers in England and Northern Ireland, effective immediately.

On July 8th 2020, in what many called a “mini budget”, Chancellor Rishi Sunak announced that England and Northern Ireland will enter into a Stamp Duty holiday until March 31st 2021.

The Chancellor stated that the changes are effective immediately, as he looks to revive Britain’s coronavirus-hit economy. He estimates that this move will save the average property buyer £4,500.

The Treasury expects the plans to cost £3.8bn but has insisted the new measures are there to “maintain the growing momentum since the easing of lockdown” in the property market.

Forming part of his Summer Statement, Sunak declared:

We need people to feel confident, confident to buy, sell, move and improve. That will drive growth, that will create jobs. So, to catalyse the market and boost confidence I have decided today to cut stamp duty.

 

What is Stamp Duty?

Stamp Duty is a tax paid by property buyers. The amount you pay depends on the cost of the property being bought, the area of the UK, and whether or not you are a first-time buyer.

Historically, in England and Northern Ireland, buyers will pay Stamp Duty Land Tax (SDLT) on properties sold for more than £125,000. For first-time buyers, this tax threshold is significantly higher at £300,000.

It is always the buyer who pays stamp duty, not the seller. Normally, your solicitor or conveyancer will calculate and pay your stamp duty on your behalf. They will usually collect the amount owed from you in advance and then submit your return and pay the stamp duty on completion day.

You have 14 days after you complete on the purchase of a property to file a return to HMRC and pay any stamp duty that is owed.

Amount received by the Treasury from Stamp Duty

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What are the changes to stamp duty?

The biggest change announced by the Chancellor was an increase in the tax relief threshold rising from £125,000 to £500,000. This means until March 31st 2021, buyers will not pay any Stamp Duty on properties worth up to £500,000.

The new SDLT rates:

New_SDLT_Rates.png 

 

When do the stamp duty changes come into effect?

The changes come into effect immediately and will last until March 31st 2021. The changes cannot be applied retrospectively.

 

What happens after 31st March 2021?

It is expected that from April 1st 2021, the previous SDLT rates will be reintroduced. The rates that SDLT would return to are:

Original_SDLT_Rates.png 

 

How can Percy Hughes & Roberts help?

At Percy Hughes & Roberts, our residential conveyancers help hundreds of people each year to move house. Our team can talk you through the legal process of buying your new home, whether you are a first-time buyer or a seasoned property owner. We can also discuss the new Stamp Duty rates and give you advice in relation to how it is paid and when.

Each residential purchase or sale is dealt with from instruction to completion by the same conveyancer, so you always know who to talk to throughout the process.

If you would like any more information regarding property sales and purchases, you can contact our expert conveyancers by calling 0800 781 3894 today or by completing the "Get in touch" form. Click here for more information.