The Chancellor Rishi Sunak has announced sweeping changes this afternoon around Stamp Duty which is excellent news for current buyers and potential buyers.

Stamp Duty is a tax applied when you buy a property and the announcement that there will be a payment holiday starting immediately means homebuyers buying their main home will save thousands of pounds.

What's Changing?

The Government has raised the stamp duty threshold to £500,000 for buyers until 31^st March, 2021

Based upon what information has been given this would suggest anyone buying their main home for less than £500,000 will not need to pay any stamp duty.

We anticipate it will not remove the higher rate for investors or clients buying a second home

We are awaiting HMRC to issue us with the formal technical guidance before we can update our online quotation system or provide any further specific guidance.

Whilst favourable to many obviously it may affect those properties on the market for above £500,000.00 and reduce appetite for those properties just above the £500,000.00 threshold.

Stamp Duty Land Tax: temporary reduced rates 

Reduced rates of Stamp Duty Land Tax (SDLT) will apply for residential properties purchased from 8 July 2020 until 31 March 2021 inclusive.

Residential Rates on purchases from 8 July 2020 to 31 March 2021

If you purchase a residential property between 8 July 2020 to 31 March 2021, you only start to pay SDLT on the amount that you pay for the property above £500,000. These rates apply whether you are buying your first home or have owned property before.

You can use the table to work out the SDLT due:

From 8 July 2020 to 31 March 2021 the special rules for first time buyers are replaced by the reduced rates set out above.

Higher rates for additional properties

The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.

The following rates apply:

Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge.

On the 1 April 2021 the reduced rates shown in the above tables will revert to the rates of SDLT that were in place prior to 8 July 2020.

Use the HMRC SDLT calculator to work out how much tax you’ll pay.

For further information, please follow the link below: 

https://www.bbc.co.uk/news/business-53319433

• Residential