Stamp Duty Holiday - How it works

The Chancellor has confirmed plans for a stamp duty holiday for anyone buying new homes up to £500,000. On the 8th July, Rishi Sunak announced that the policy would come into effect from today and last until March 31 next year. This will mean that around 9 out of 10 people will pay no stamp duty at all, he added.

What does the Stamp Duty Holiday mean?

When you are buying a property there will be additional costs to pay such as stamp duty land tax which is arguably a reason why there has been a dip in the market. The tax will be calculated based on the tax rates dependant on the purchase price and the cost can be significant.

The stamp duty rules have been updated on the 8th July 2020 in the Government announcement whereby the Chancellor has confirmed stamp duty will be slashed with a view to help retrieve the property market. In the announcement the Chancellor has stated that those buying their main property will be exempt from paying stamp duty up to the first £500,000. The exemption on stamp duty will apply whether you are buying your first home or if you are buying a residential property in a Limited Company name saving thousands of pounds.

The following rates of stamp duty will apply until the 1 st April 2021:- Property or lease premium

Property or lease premium or transfer value

SDLT rates:

Up to £500,000 - Zero

The next £425,000 (the portion from £500,001 to £925,000) - 5%

The next £575,000 (the portion from £925,001 to £1.5 million) - 10%

The remaining amount (the portion above £1.5 million) - 12%

We expect the new update will have a huge impact on the housing market and will bring the market back up to speed. Remember, if you need help moving, please do get in touch with me.