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On the 8th of July 2020, the Chancellor of the Exchequer, Rishi Sunak announced a temporary stamp duty holiday until the 31st of March 2021. This temporary stamp holiday cuts the rate of stamp duty to zero for all the properties under £500,000 for first time home buyer.
For example, if you are buying a property that is £500,000, before the stamp duty holiday you would have paid £15,000, now you pay £0.
The taxable amount will only be applied for all properties above £500,000. For example, if you are buying a property that has a purchase price of £600,000, only the amount in excess above £500,000 stamp duty shall be applied. Now you would only pay 5% (rate of stamp duty for a purchase price of property £500,001 - £925,000) of the excess amount above £500,00, thus, you pay £5,000. Without a stamp duty holiday, you would have paid £20,000
Also, there has been cut for buyers who are acquiring the property as additional properties, for example, the buy-to-let investors. The new rate for additional properties starts at 3% for properties up to £500,000. For example, if the property price is £500,000, you would pay £15,000. Without the stamp duty holiday, you would have paid £30,000.
After 31 March 2021, the rate of stamp duty tax will revert to the standard rates. But there will be an extra 2% surcharge on stamp duty for non-UK buyers after 31 March 2021.
Home buyers who want to take advantage of the stamp duty holiday must act quickly as the demand for mortgages is high and due to the Covid-19 restrictions, there might be delays in the process.
Act now before it’s too late.
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