Stamp duty holiday to help property market
Stamp Duty Holiday
Chancellor Rishi Sunak told the House of Commons in a special statement at lunchtime on 8 July that the new measures, which temporarily increases the ‘nil rate’ band of stamp duty from £125,000 to £500,000; will reduce the average stamp duty bill for a main home from £4,500 to zero. This was part of a number of measures put in place to assist the economy following the coronavirus crisis and to boost the property market.
However, due to wide variations in house prices across the UK, the average savings that home buyers in England can typically expect to make from the stamp duty holiday can vary from hundreds of pounds to as much as £15,000.
According to calculations from Rightmove, the announcement of the Stamp Duty Holiday triggered 8.5m visits in one day, its biggest ever audience in one day. And OnTheMarket revealed that it delivered a record number of leads to agents and developers, with sales leads up by 12 per cent on the previous Wednesday prior to the announcement, and valuation leads increasing by 19 per cent.
Chancellor Rishi Sunak said:
“Uncertainty abounds in the market – a market we need to be thriving.
“We need people feeling confident – confident to buy, sell, renovate, move and improve. That will drive growth. That will create jobs.
“So to catalyse the housing market and boost confidence, I have decided today to cut stamp duty.
"The average stamp duty bill will fall by £4,500. And nearly nine out of 10 people buying a main home this year, will pay no stamp duty at all."
What are the new stamp duty rates?
The new measures put in place by Sunak will mean that stamp duty will only come into place on property above £500,000 and is for people buying their first home, or moving up or down the housing ladder.
The new stamp duty rates during the holiday are:
- Up to £500,000: 0%
- On the portion from £500,001 to £925,000: 5%
- On the portion from £925,001 to £1.5m: 10%
- Above £1.5m: 12%
For buyers purchasing additional property for £40,000 or more, such as second homes or landlords who purchase a buy-to-let property, these will be subject to pay an extra 3% surcharge of stamp duty on top of the new holiday stamp duty rates, with the 3% being applicable to the entire purchase price of the property. So, for those buying additional homes these will attract a 3% stamp duty bill on the first £500,000 of property.
This will still result in a saving, because of the 3% rate previously applied on the first £125,000, with higher rates above that.
It is worth noting that stamp duty is different if the property or land is in Scotland or Wales.
Residential Conveyancing Solicitors
At Russell & Russell Solicitors we have a specialist residential conveyancing team who can provide expert guidance and services on all areas of property law and conveyancing matters.
If you would like to speak us regarding the new stamp duty holiday or have any other questions concerning residential conveyancing please contact our specialist residential property team on 0800 103 2600 or make online enquiry.
Please note that this article is meant as general guidance and not intended as legal or professional advice. Updates to the law may have changed since this article was published