The chancellor has announced a temporary holiday on stamp duty up to £500,000 as part of a number of measures to help stimulate the economy. We have listed below the key facts following this announcement.
Prior to the announcement In England and Northern Ireland stamp duty was paid on land or property sold for £125,000 or more. First-time buyers paid no tax up to £300,000 and 5% on any portion between £300,000 and £500,000. For people who have bought a home before, stamp duty rates are 2% on £125,001-£250,000, 5% on £250,001-£925,000, 10% on £925,001-£1.5m, and 12% on any value above £1.5m. Following the decision no stamp duty will be paid on purchases up to £500,000
Prior to the chancellors decision someone purchasing a property at £495,000 would pay £14,750 in stamp duty, a first time buyer would pay £9,750. Assuming completion takes place before the 31st of March 2021 the stamp duty is now zero.
People buying second homes and buy-to-let properties will also benefit, but will still have to pay the 3% extra duty due on the entire price.
The holiday applies from the 8th of July, which unfortunately means if you completed on your property purchase yesterday or before you will have to pay the full usual stamp duty.
For homes costing more than £500,000, buyers will pay 0 % on the first £500,000, five per cent between £500,001 and £925,000 and 10 per cent between £925,001and £1.5 million. This increases to 12 per cent for homes costing more than £1.5 million.
With 81% of all residential property stock for sale in England priced under £500,000 this could be a real boost the housing market, although with lenders still reluctant to release 90 and 95 percent products many first time buyers may not be able to take advantage of this offer. Fortunately there are some excellent schemes available to help buyers purchase their first home and your friendly Blue Q Mortgage Adviser will be happy to discuss these with you.