No stamp duty to pay on purchases up to £500,000 No stamp duty to pay on purchases up to £500,000

No stamp duty to pay on purchases up to £500,000

New stamp duty threshold| Published in Magazine on 8 July 2020 by our Marketing Team

The Chancellor of the Exchequer, Rishi Sunak, has today announced an immediate change to the Stamp Duty Land Tax threshold. Anyone buying a residential property of up to £500,000 will pay no stamp duty, whether they are a first time buyer, or if they have owned property before*. The “Stamp Duty Holiday” will be in effect until 31 March 2021 so don’t delay, register your property requirements with Pygott & Crone today!

The Stamp Duty Holiday is a welcome boost to the housing market and offers a substantial saving to buyers, whether they are buying their first home or are getting back on the property ladder having owned property in the past. First Time Buyers previously did not have to pay stamp duty on purchases up to £300,000 and this has now increased to £500,000. Stamp duty is calculated at different rates on “portions” of the purchase price.

The new thresholds are as follows:

Up to £500,000 – zero stamp duty
£500,001-£925,000 – 5% stamp duty
£925,001-£1,500,000 – 10% stamp duty
£1,500,000 and above – 12% stamp duty

For example the average purchase price in the UK of £248,000 now represents a saving of £2,460*

For your reference, previously only the portion up to 125k was zero rated, 2% was payable on the portion 125-250k, 5% on 250-925k, 10% on 925k-1.5m, and 12% thereafter. So how much have you saved? We’ve produced some illustrative examples below:

Purchasing a £200,000 house

Before: £1,500 stamp duty payable (zero on the 0-125k portion; £1,500 on the 125-250k portion)
Now: zero, a saving of £1,500

Purchasing a £400,000 property

Before: £10,000 stamp duty payable (zero on the 0-125k portion; £2,500 on the 125-250k portion, £7,500 on the 250-925k portion)
Now: zero, a saving of £10,000

Purchasing a £600,000 property

Before: £20,000 stamp duty payable (zero on the 0-125k portion; £2,500 on the 125-250k portion, £7,500 on the 250-925k portion)
Now: £5,000, a saving of £15,000

These above examples assume an individual buying a residential property that will be their only property, and are for illustrative purposes only. You can check how much stamp duty you are likely to pay using the Government’s stamp duty calculator and you should always check your stamp duty liability and any other costs due with your solicitor or conveyancer.

* For people buying an additional property, the 3% higher rate still applies but this still represents a saving.

It’s an ideal time to get on the property ladder so if you are not already registered with Pygott & Crone, why not do so today? You can specify your precise property requirements which you can manage online 24/7, and you’ll automatically be matched to suitable properties before they come on the market by our highly trained staff in-branch. Don’t wait for the property to go on Rightmove, register today to be the first to know!

For more company news and insights from Pygott & Crone, click here

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