How a stamp duty holiday would affect the property market and house prices


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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It's thought the government is planning to introduce a stamp duty holiday

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It’s thought the government is planning to introduce a stamp duty holidayCredit: Alamy

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.

Of course, bear in mind stamp duty is a devolved issue with the tax itself and the applicable rates differing in Scotland and Wales.

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

Stamp duty rates are different in Scotland and Wales.

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.

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