Idnan Liaqat, Head of Real Estate, Axiom Stone Solicitors, assesses the Chancellor’s latest measures
“Rishi Sunak’s statement on Stamp Duty will come as music to people’s ears who are purchasing their first home. From now until 31 March 2021, first-time buyers will not have Stamp Duty to pay on properties valued up to £500,000. To many of us this means potential savings of thousands of pounds, which will hopefully see a boost in the property market with many taking advantage of the new rules.”
In a drastic move to help boost the UK’s property market and assist first-time buyers on the residential property ladder, Chancellor Rishi Sunak’s ‘’Stamp Duty holiday’’ is a market, which has seen to take a hit during the coronavirus pandemic. While the effects of the holiday will be monitored over the next few months, it is believed that many will be saving tens of thousands of pounds.
Stamp Duty Land Tax
Stamp Duty is lump sum that is payable to H M Revenue and Customs on property purchases. Prior to Wednesday 8 July 2020, all home buyers had to pay Stamp Duty on houses worth more than £125,000, or in the case of first-time buyers – none would be payable up to the sum of £300,000.
A short ‘’holiday for the homebuyers’’ and the position for first time buyers
The threshold for Stamp Duty payment has now been increased to £500,000. This will allow many to ‘’look on the lower of the housing market to avoid paying significant sum of Stamp Duty’’ whether purchasing under a company name or individual. For example, first-time buyers purchasing a property for £500,000., could potentially allow them to save over £10,000.
The new rates for Stamp Duty will fall as follows:
First-time buyers and standard rate
Additional properties (Buy to Let)
The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.
The following rates apply:
New leasehold sales and transfers
The nil rate band which applies to the ‘net present value’ of any rents payable for residential property is also increased to £500,000 from 8 July 2020 until 31 March 2021.
The following rates will apply:
For guidance and advice in relation to any Real Estate matters, please contact Idnan Liaqat, Head of Real Estate or Khaled Ellatif, Trainee solicitor, in Axiom Stone’s Real Estate Department on 0208 951 6989.
Note: the information contained in this article is accurate at the time of publication on 18 May 2020. The remarks in this article are not a substitute for legal advice on the specific circumstances of any case.