Chancellor, Rishi Sunak, announced a temporary stamp duty holiday on all homes under £500,000. This will come into effect immediately.
The level at which the tax is charged has been temporarily raised to £500,000 until 31st March 2021, helping to boost the property market and aid individuals who are struggling to buy due to the Coronavirus outbreak.
Mr Sunak stated that “the average stamp duty bill will fall by £4,500 and nearly 9 out of 10 people buying a main home this year will pay no stamp duty at all.”
This stamp duty holiday only apply to buyers in Northern Ireland and England.
What is stamp duty?
Stamp duty is a tax that anyone buying a property over a certain price must pay. How much tax you pay will depend on the price of the property that you are purchasing.
This levy is paid on land or properties that are sold for £125,000 and over. However, first time buyers do not pay tax on purchases up to £300,000.
However, the usual stamp duty rates have been replaced by those below.
|Tax Band||Normal Rate|
|Up to £500,000||0%|
|The next £425,000 (the portion from £500,001 to £925,000)|
|The next £575,000 (the portion from £925,001 to £1.5 million)||10%|
|The remaining amount (the portion above £1.5 million)||12%|
Higher rates for additional properties
The 3% higher rate for purchases of additional properties still applies on top of the temporary rates (shown above) until 31st March 2021.
|Tax Band||Additional Property|
|Up to £500,000||3%|
|The next £425,000 (the portion from £500,001 to £925,000)||8%|
|The next £575,000 (the portion from £925,001 to £1.5 million)||13%|
|The remaining amount (the portion above £1.5 million)||15%|
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