10 July 2020
Great news, property seekers! The Chancellor has announced changes to stamp duty rates to help reduce costs for home buyers. Both first time buyers and home movers are exempt from paying stamp duty on homes up to the value of £500,000 until March 2021.
As part of his summer statement, Chancellor of the Exchequer, Rishi Sunak, stated that the Government will be increasing the threshold on properties exempt from Stamp Duty fees up to the value of £500,000, meaning that many homes will be much more affordable for buyers across the country. The aim is to boost the housing market, as well as to encourage and enable buyers to purchase their new home following the coronavirus pandemic.
The ‘stamp duty holdiay’ for properties up to £500,000 in value will be in place until March 2021.
What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is a fee that anyone purchasing a house or land in England has to pay if their property is over a certain amount specified by the government. It can add a hefty sum to an already expensive process, so having this 'holiday' may save many buyers thousands of pounds in extra expenses - giving you more financial freedom to make your new space feel like home. For instance, the stamp duty holiday on a property worth the full £500,000 would net you a saving of £15,000!
If the property you're purchasing is your main residence and is under £500,000, you won't pay any stamp duty on it.
How much Stamp Duty will I pay now?
The stamp duty charged for properties over this amount will depend on the purchase price. Charges take into account the threshold and only the excess amount will be eligible to be taxed. Values from £500,001 to £925,000 will be taxed at 5%, while properties from £925,001 to £1.5 million will be taxed at 10%.
For instance, if you buy a house for £575,000, you would pay 0% on the first £500,000 and 5% on the final £75,000. The total stamp duty payable would be £3,500.
Landlords and those purchasing an additional home (ie. buy to let, or a holiday residence) are also eligible for the tax cut but will still have to pay the extra 3% of stamp duty they were charged under the previous rules.
I've already reserved a property - can I still benefit?
Stamp duty is payable at completion, which means that if you have just reserved a property or have only exchanged contracts, then you will still be able to take advantage of the new threshold. If your property completed before 8th July, then you will be charged under the previous rates.
With the new threshold in place, now is the perfect time to start looking for your new home in Yorkshire. We have developments
in desirable and attractive areas across the region and our friendly sales team is available to answer any queries you may have regarding viewings or reservations.