The UK government has granted a stamp duty land tax holiday to all homebuyers in England and Northern Ireland with immediate effect. This means that if you purchase a home up to value of £500,000 you will not need to pay any stamp duty on this purchase.
How long is the Stamp Duty holiday for?
The last stamp duty holiday was way back in 2008, in a bid to lift the market following the financial crisis. The current stamp duty holiday will however be not quite as long, at around nine months, and will end on 31 March 2021.
Where can I buy properties to take advantage of this?
Stamp duty is only paid in England and Northern Ireland, since the devolved administrations of Scotland and Wales have set their own property taxes (Land & Buildings Transaction Tax in Scotland, and Land Transaction Tax in Wales).
What do I ordinarily pay stamp duty on?
Stamp duty is payable on the purchase of a property – typically within two weeks of completion – and is charged in ‘slices’ based upon the property price.
A 2% charge applies to the slice of property between £125,000 and £250,000. With the average home in England selling at £247,000, existing homeowners buying their next home could potentially save around £2,440 each.
Will buy-to-let property and second homes be included in the stamp duty holiday?
Rishi Sunak’s announcement may have slightly disappointed buy-to-let landlords and anyone planning to buy a second home. When you buy any property in addition to your main residence, be it a second home, a holiday home or a buy-to-let, there is an additional stamp duty charge. This starts at 3% and then rises in bands, climbing to 15% for the most expensive properties.
The omission of additional properties in the stamp duty holiday is probably a wise political move on the part of the Chancellor, as it could be seen as disproportionately favouring landlords and those with multiple homes. That said, buy-to-letters should welcome the measure as it stands, as they will still be able to reduce their SDLT bill by more than a third in most cases.
How much can you save with the stamp duty holiday?
The maximum amount a buyer could save would be if they bought a home worth £500,000 which is the threshold for the exemption. Stamp duty on this would be £15,000.
Will the stamp duty holiday be extended?
At this stage we don’t know if the Stamp Duty Holiday will be extended, however we will be sure to keep you posted on any further government announcements.
If you have any further questions about the Stamp Duty holiday and how this can benefit your investment plans, email the Modus Property team at email@example.com
Original Source Article: https://www.unbiased.co.uk/news/mortgages/rishi-sunak-announces-stamp-duty-holiday