As many are now aware, the Chancellor cut the stamp duty on homes worth up to £500,000. This has been put in place to help kick-start the housing market, which has somewhat stalled during the coronavirus crisis.
This cut will be beneficial to many but how exactly is still slightly misunderstood by the majority, in order to help we have broken down the key details below.
What is stamp duty?
Stamp duty land tax (SDLT) is the sum of money that must be paid when an individual purchases either a property or a piece of land. The quantity of the stamp duty depends on the overall price of the property/land.
Stamp duty is also contingent on the type of property/land purchased; whether it is residential, non-residential, mixed-use or whether you are a first-time buyer.
Where does stamp duty apply?
Stamp duty land tax applies to properties in England & Northern Ireland. In Scotland, Land & Buildings Transaction Tax must be paid instead. In Wales a Land Transaction Tax must be paid for sales that were completed on or after 1 April 2018.
When must stamp duty be paid by?
A stamp duty land tax return is due within 14 days of completion on a property/land, otherwise penalties & interest may be charged. Payment must be sent to HM Revenue & Customs.
How much will you save?
Stamp duty payment will no longer be required up to £500,000 during the announced holiday. This means that many will now save thousands of pounds when purchasing property/land priced £500,000 & under.
As an example first-time buyers purchasing a property for £500,000 will save £10,000 on stamp duty, as per current rates. With non-first time buyers saving £2,260 when purchasing a property for £238,000.
It is clear that the current savings are substantial enough to convince many of us that now is a good time to make the move we have been considering.
Our conveyancing team have been working throughout the current pandemic, allowing them to keep up to date with these changes. We are now working from our offices & are on hand to help you understand any changes further, as well as actioning any property/land purchase you are considering.