The Stamp duty holiday – what does it mean?
The Chancellor has announced a stamp duty holiday from July 8th 2020. For a limited time, the level at which stamp duty is charged on a residential property is being temporarily raised to £500,000.
Before this announcement, it is only if you buy a home under £125,000 (or £300,000 for first-time buyers) that you are exempt from paying any stamp duty.
What didn’t make it into the Chancellor’s statement was the fact the government has handed investors and second home buyers preferential treatment as well, with a sizeable cut in the stamp duty surcharges they now have to pay. Second properties purchased below £500,000 will pay a 3% surcharge rather than the usual 5-8%.
When does this stamp duty holiday start?
Immediately. So from July 8th, you won’t need to pay stamp duty on a property below £500,000. This stamp duty cut will stay in place until 31st March 2021.
How much will I save from the stamp duty holiday?
The Chancellor said in his statement that this would mean the average stamp duty bill would fall by £4,500 and that nearly nine out of ten people buying their main home will pay no stamp duty at all.
Those buying a home up to £500k will pay no stamp duty at all.
Buy a home worth more than £500,000 and you’ll pay stamp duty at the normal rate – starting at 5% for properties at £500,001 – £925,000. You can find a full break down of how much you’ll pay and different bands in our guide to stamp duty.
This applies to England and Northern Ireland only.
Does the stamp duty holiday apply to buy to let properties and second homes?
Yes. Second properties under £500,000 would have had to pay a 5-8% surcharge but as of today pay only 3%.
Why has the government introduced a stamp duty holiday now?
It is thought that this would boost the property market and help buyers struggling because of the coronavirus crisis.
Here is the rates guide from July 8th 2020 – 31st March 2021:
| PURCHASE PRICE OF PROPERTY | STAMP DUTY RATE | STAMP DUTY RATE FOR ADDITIONAL |
|---|---|---|
| Up to £500,000 | 0% | 3% |
| Over £500,000 to £925,000 | 5% | 8% |
| Over £925,000 to £1.5m | 10% | 13% |
| Over £1.5m | 12% | 15% |
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