On the 8th of July 2020, the Chancellor announced in a statement a Stamp Duty holiday until the 31st March 2021 for up to £500,000. Stamp duty Land Tax (SDLT) is charged when property or land is bought within England and Northern Ireland. The payable amount is determined by the value of the asset. 


Why has a 0% stamp duty been introduced?

In such delicate financial times, tax relief such as the stamp duty holiday gives home buyers a helping hand. It is not only financially rewarding for homeowners, the larger economical picture can also reap the benefits. In the 2nd quarter of 2020, the property industry saw a drop of 50% in transactions. The construction industry is worth £39billion to the economy, therefore keeping the industry running is critical.

 

As a buyer, am I entitled to the stamp duty holiday?

If you are purchasing a residential property in England and Northern Island between the 8th July 2020 and 31st March 2021 for less than £500,000 net, you will have 0% stamp duty. The treasury has stated that the introduction of 0% stamp duty will result in 9/10 buyers not having to pay any stamp duty. The relief will benefit a large proportion of first-time buyers, those wanting to move up the property ladder and those wanting to scale down. 


What if I am purchasing for investment purposes?

The rules differ for those purchasing a property, not for personal residential use. Buy-to-let or investment purchasers will pay 3% up to £500,000. The percentage payable then increases depending on the property value. 

For those living in Scotland, Wales, and Ireland, the regulations and tax charges differ. Following the Gov.uk website for a full list of new tax charges. The Chancellor has announced that by introducing the stamp duty holiday, the average home buyer will save £4,500. With such uncertainty around both the economy and public health, the small break in relief has come at a necessary time for those looking to buy.

Sources
https://www.gov.uk/stamp-duty-land-tax
https://www.which.co.uk/money/mortgages-and-property/home-movers/stamp-duty/buy-to-let-stamp-duty-a26by5t8dmcb
https://www.moneysavingexpert.com/news/2020/07/sunak-stamp-duty-announcement-/
https://sevencapital.com/property-news/investors-welcome-stamp-duty-holiday/