By David Williams, Director & Head of Property

In an attempt to boost the housing market following the lockdown, the government has raised the stamp duty (SDLT) threshold in England and Wales to £500,000.00 until March 31st 2021. This will result in significant savings for home buyers both above and below the £500.000.00 threshold.

The tiered system applied to stamp duty means buyers purchasing up to £500,000.00 will pay no stamp duty and those purchasing at a higher price will only pay at the normal rates on the value above £500.000.00. The new rates will be: –

£0-£500,000 = 0%

£500,001-£925,000 = 5%

£925,001-£1.5m = 10%

Above £1.5m = 12%

The government predicts that the average stamp duty bill will fall by £4,500, but for properties priced at £500,000 the saving could be £15,000.

If you are buying a second home or buy to let property the 3% stamp duty surcharge will still apply. However, the surcharge will be against the new rates resulting in savings for properties over £125,000.00. Before the change, if you bought an investment property for £250,000, you would have paid 3% on the first £125,000 and 5% on the second £125,000, resulting in a stamp duty bill of £10,000. From today, you’ll only pay 3% stamp duty on the whole purchase price, meaning a bill of £7,500 and a saving of £2,500.

The rates for second properties and buy to let are below.

£0-£500,000 = 3%

£500,001-£925,000 = 8%

Percentage £925,001-£1.5m = 13%

Above £1.5m = 15%

With the new rates for duty, and the extremely low interest rates being offered by lenders, it would seem there has seldom been a better time to purchase.

 
If you intend to make a move in the property market please contact David Williams in our Property Department on 01630 411222.