Stamp Duty threshold raised to £500k till March 2021 – Nearly 89% of all house sales will now be entirely exempt from the basic level of Stamp Duty
It has been announced by Rishi Sunak, Chancellor of the Exchequer, that residential property transactions costing up to £500,000 will be exempt from stamp duty land tax (SDLT) until 31st March 2021. The change takes effect immediately and applies to all residential property transactions in England and Northern Ireland. This is exciting news for both sellers and buyers as raising the current threshold from £125,000 to £500,000 could save thousands. There will also be no distinction between first-time buyers and those who have bought previously. For properties costing more than £500,000, tax will only be levied on the amount paid above £500,000.
The impact of the change will be as follows:
- Property price up to £500,000 – stamp duty 0%
- The next £425,000 (from £500,001 to £925,000) – 5%
- The next £575,000 (from £925,001 to £1.5 million) – 10%
- Remaining amount above £1.5 million – 12%.
The 3% higher rate that already applies for purchases of additional dwellings (for example, second homes and buy-to-let properties) will apply on top of the new rates, which means tax will be payable here at 3% on prices up to £500,000.
The chancellor has said that 9/10 people buying property will pay no SDLT while the change is in effect, while those paying will save around £4,500.
With property transactions nationwide said to have halved in May due to the impact of coronavirus, this comes as good news for the housing market and we are optimistic that the change in SDLT will boost the number of houses on the market and lead to an increase in people wanting to sell up and move. If you would like further information on the new SDLT, or to discuss putting your property onto the market, contact our property teams today.