Stamp Duty Holiday
The Chancellor of the Exchequer, Rishi Sunak has announced a temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland.
The tax threshold has been temporarily raised until March 2021 to boost the property market and help buyers struggling because of the coronavirus crisis.
The changes have come in with immediate effect.
What is stamp duty?
Stamp duty is a tax paid by people buying properties. This tax applies to both freehold and leasehold properties – whether you’re buying outright or with a mortgage.
The government’s annual take from stamp duty is around £12bn, according to the latest figures released by HM Revenue and Customs (HMRC). That’s roughly equivalent to 2% of the Treasury’s total tax take. The nine-month stamp duty holiday will cost the Treasury an estimated £3.8bn.
When do you have to pay Stamp Duty?
You must send an SDLT return to HMRC and pay the tax within 14 days of completion. If you have a solicitor, agent or conveyancer, they’ll usually file your return and pay the tax on your behalf on the day of completion and add the amount to their fees.
What has changed?
The government has temporarily increased the stamp duty threshold to £500,000 for property sales in England and Northern Ireland, until 31 March 2021. Anyone completing on a main residence costing up to £500,000 between 8 July and 31 March will not pay any stamp duty, and more expensive properties will only be taxed on their value above that amount.
How much stamp duty will I pay now?
If the property purchased is your main home you won’t pay any stamp duty on it at all if it costs £500,000 or less. The next portion of the property’s price (£500,001 to £925,000) will be taxed at 5%, and the £575,000 after that (£925,001 to £1.5 million) will be taxed at 10%. The remaining amount (over £1.5 million) will be taxed at 12%.
Before the announcement, stamp duty in England and Northern Ireland was paid on land or property sold for £125,000 or more, while first-time buyers did not pay any stamp duty up to £300,000. But this stamp duty holiday replaces the first-time buyer discount.
Landlords and second home buyers 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.
How much Stamp Duty can be saved on a Citadel Homes property
Skelton Court – priced from £260,000
Saving of up to £4,250
The Dell, Talkin – priced from £595,000
Saving of up to £15,000
Is now the time to buy?
Rightmove has already reported a 49% increase in enquiries on properties priced between £400,000 and £500,000. They added that it can take on average eight weeks to find a buyer and a further 15 weeks for the transaction to go through, so people coming to the market in late Autumn may find they run out of time before the stamp duty cut ends. Therefore now is definitely the time to start the ball rolling if you are thinking of moving home or getting your foot on the housing ladder.
Why not take full advantage of the reduction in stamp duty and become a proud owner of a Citadel Homes property. We only have two remaining properties on each of our current developments. We have luxurious serviced apartments in Wetheral and stunning four bed farm-style houses in the quaint village of Talkin. We’re sure we’ll have something you’ll love as much as we do.