In the Chancellor’s mini budget (8 July), Rishi Sunak announced a temporary holiday on stamp duty in England and Northern Ireland to try and boost the property market.
It means homebuyers won’t pay stamp duty on homes up to £500,000 until 31 March 2021. This could potentially save homebuyers thousands of pounds in tax.
The Treasury says nine out of 10 people getting on or moving up the property ladder (or downsizing) this year will pay no stamp duty as a result.
What is stamp duty?
Stamp duty is a tax paid to the government by people buying properties. The amount depends on where you are in the UK and the price of the property.
Previously the threshold where you’d start paying stamp duty was £125,000, or £300,000 for first-time buyers (if buying a property worth less than £500,000).
Now if you’re buying a property under the new £500,000 threshold you pay nothing in stamp duty. If you are buying a property over this amount you will not pay anything on the first £500,000 (saving you £15,000), and then normal rates above that.
Does the stamp duty holiday apply to buy-to-let?
Landlords and second home buyers are also eligible for the tax cut but will still have to pay the extra 3% of stamp duty they were charged under the previous rules, but this will be on the whole purchase price.
It is best to speak to a Linear adviser who will be able to explain stamp duty and help you understand how it will affect your purchase.