PROPERTY buyers and sellers alike may be wondering how a proposed stamp duty holiday will affect them, as well as house prices – so we take a look.
It comes as the government is reportedly considering whether to introduce a six-month stamp duty holiday on up to the first £500,000 of a property’s value in England and Northern Ireland.
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The move isn’t expected to take force until the chancellor’s Autumn Budget later this year, but it’s thought it could be mentioned in Rishi Sunak’s mini-Budget this Wednesday (July 10).
Currently, only the first £125,000 of a property’s value in England and Northern Ireland is stamp duty free if it’s your main residence, or for first-time buyers it’s the first £300,000 of a property’s value if it costs under £500,000.
Plus, in England and Northern Ireland there’s also a 3 per cent stamp duty surcharge on those buying second homes.
What is stamp duty?
STAMP duty land tax (SDLT) is a lump sum payment anyone buying a property or piece of land over a certain price has to pay.
Currently, all house-buyers in England and Northern Ireland must pay stamp duty on properties over £125,000.
The rate a buyer has to fork out varies depending on the price and type of property.
Rates are different depending on whether it is residential, a second home or buy-to-let, or whether you’re a first-time buyer.
The current system in England for residential properties means:
- First-time buyers pay nothing on properties below £300,000 (and relief available on properties of up to £500,000)
- You pay nothing if the property costs below £125,000
- You pay 2 per cent if it is worth between £125,001 and £250,000
- You pay 5 per cent if between £250,001 and up to £925,000
- You pay 10 per cent if it is between £925,001 and £1.5million
- You pay 12 per cent on anything over £1.5million
For second homes or buy to let properties:
- 3 per cent on purchases up to 125,000
- 5 per cent on purchases between £125,001 and £250,000
- 8 per cent on purchases above £250,001 and £925,000
- 13 per cent on purchases above £925,001 and £1.5 million
- 15 per cent on purchases above £1.5 million
We’ve spoken to an array of property experts to uncover the winners and losers from this potential shake-up.
Home movers and downsizers will save thousands
The most obvious winners as a result of any cut to stamp duty is home movers and downsizers.
Campaign group the Home OwnersAlliance (HOA) explains that raising the stamp duty threshold to £500,000 will save almost 900,000 people from forking out on stamp duty.