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What is Stamp Duty?
Stamp Duty Land Tax is paid by people buying properties or land across England and Northern Ireland.
What amount of Stamp Duty was paid before the government’s announcement?
The amount of Stamp Duty Land Tax paid on a property purchase is dependent on the location of the property within England and Northern Ireland, the price of the property and whether it is a first-time or replacement home or an additional property.
First-time buyers have enjoyed discounted rates up to £500,000 since November 2017.
For those who had previously owned a home, for properties purchased over £125,000 stamp duty rates were 2% on the proportion of the purchase price between £125,001-£250,000, 5% on the proportion between £250,001-£925,000, 10% on the proportion between £925,001-£1.5m, and 12% on the proportion above £1.5 million. Anyone buying an additional property in England and Northern Ireland have also paid an extra 3% of stamp duty on top of those basic rates.
How have the Stamp Duty rules changed?
In a bid to boost the property market hit by lockdown, the government have announced a temporary increase of the lower stamp duty threshold to £500,000 for property purchases (for first time buyers or those replacing their main and only home) in England and Northern Ireland with immediate effect. This means anyone buying their first property or replacing their main home (moving house) between 8th July 2020 and 31st March 2021 will not incur Stamp Duty Land Tax up to £500,000.
Those buying second homes and buy-to-let properties and all company purchasers will also benefit though will still have to pay the 3% higher rate duty on the entire property price for properties of £40,000 – £500,000.
Further information on the changes to Stamp Duty Land Tax can be found here: https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates.
If you are looking to purchase a house, or have any other conveyancing needs, please contact our expert team on 01482 225566 or at info@jameslegal.co.uk.
