During the time of lock down, the Coronavirus paused many industries, the property industry included. To help buyers struggling due to the coronavirus crisis, and to help boost the property market, the Chancellor of the Exchequer, Rishi Sunak, announced a Stamp Duty holiday for certain properties. But what does this mean for you as a home buyer?
What is Stamp Duty?
‘Stamp duty’ is a tax paid by anyone purchasing a property or land in the UK. In Scotland and Wales, it is known as ‘land and buildings transaction tax’ and ‘land transaction tax’.
The rate of stamp duty that you pay depends upon the price of the property you are purchasing, and the region of the UK you are buying in. There are plenty of Stamp Duty calculators online to see how much you will pay on your purchase.
What does a Stamp Duty holiday mean?
From Monday 27 July the threshold at which you start paying Stamp Duty has increased significantly. In England and Northern Ireland, there is now no Stamp Duty on any primary residential property on the first £500,000. In Scotland and Wales the threshold on a primary residence has increased to £250,000. This temporary change will last until 31 March 2021. The new rules mean home buyers could save substantial sums on their dream properties. For example, a first time buyer purchasing a property worth £400,000 would have incurred around £5,000 Stamp Duty bill prior to the Rishi Sunaks’, announcement now their stamp duty bill will be nothing.