There’s a bit of good news today for those in the process of buying a new property or those who are thinking of doing so in the next nine months. Chancellor Rishi Sunak has announced that the government will be temporarily scrapping Stamp Duty Land Tax payments on all purchases up to the value of £500,000.
This stamp duty holiday comes into effect immediately. Any property purchase from 8thJuly 2020 will be exempt from stamp duty on anything up to half a million pounds. In cases where the purchase price is under that sum, there will be absolutely no stamp duty to pay. For purchases where the price is above £500,000, the buyers will only be subject to a percentage tax on any amount above and beyond the threshold.
The new rules are applicable to first time buyers, experienced buyers and buy-to-let landlords alike. However, those buying second homes or buy-to-let properties will still have to pay the additional 3% surcharge that is generally due on these types of purchases. It’s also important to keep in mind that the new rules only relate to Stamp Duty Land Tax itself, which is payable in England and Northern Ireland. So far there have been no equivalent announcements about Scottish Land and Buildings Transaction Tax or Welsh Land Transaction Tax.
The move is believed to benefit nine in ten homebuyers and will save an average of £4,500 per purchase. The government’s hope is that this stamp duty holiday will help to kickstart the housing market after the coronavirus pandemic and subsequent lockdown.
The scheme is great news for home buyers who are set to complete from today onwards, as well as all those who plan to buy at any point until the suspension ends on 31stMarch 2021.
In fact, the only people who probably won’t be pleased about the suspension are those homebuyers who completed on their new property yesterday.