Stamp Duty holiday to kick start the property market again
In July 2020, HMRC have reduced the rates of Stamp Duty on properties up to the value of £500,000 in England and Northern Ireland, potentially saving buyers up to £15,000 on the cost of their new house.
This Stamp Duty holiday will last until 31st March 2021, providing an excellent incentive for both buyers and sellers who may have been considering a a move in the near future.
Stamp Duty is one of the more complicated taxes to work out as it operates in bands: Before this Stamp Duty holiday, only houses valued up to £125,000 were completely free of the tax, with 2% due on the part of the cost between £125,000 and £250,000 and then 5% above £250,000 (and 10% and 12% due on the proportion of the cost above £925,000 and £1.5million respectively)
With the current holiday, nothing is due on properties up to £500,000, (above this the original bands remain in place). In real terms, this means that Stamp Duty on a house bought at £625,000 would be £6250 rather than £21,250, a considerable saving and one that is likely to benefit both sides of the market.
* Stamp Duty Calculations: a house bought at £625,000 would be £6250 (5% of £125,000 – the amount over the £500,000 threshold) rather than £21,250 (2% of £125,000 + 5% of £375,000 )