Stamp duty holiday: What does it mean for you?

In his summer statement this week, the Chancellor announced a temporary holiday on stamp duty, designed to help potential buyers who have been financially impacted by the Coronavirus pandemic. The announcement means there are significant savings to be made on purchasing your next home, until 31st March 2021.

To help you in your search for the perfect home, we’ve broken down exactly what measures have been introduced, and what they mean for you.

About Stamp Duty

What is stamp duty?

Stamp duty land tax is a lump sum payment those buying a property or piece of land over a certain price have to pay. The rate a buyer has to pay varies depending on the price and type of property, but generally you would expect to pay more stamp duty the higher the property is worth. Stamp duty rates are different for first time buyers and in Scotland and Wales.

What has changed?

The government has temporarily increased the stamp duty threshold to £500,000 for property sales in England and Northern Ireland, until 31 March 2021. That means any home-buyers purchasing a property under £500,000 between 8th July 2020 and 31st March 2021 will not pay any stamp duty.

What does this mean for first time buyers?

The threshold increase to £500,000 means potential home buyers are able to look on the lower end of the housing market, to avoid having to pay any stamp duty. If a first-time buyer purchases a property for £500,000, the new system could allow them to save £10,000 on stamp duty, compared to the previous rate.

Can I still benefit if I’ve already completed a purchase?

The holiday applies from 8 July, which means anyone completing a property purchase before that date will have to pay the full normal stamp duty. Stamp duty is payable upon completion, so if you’ve exchanged contracts and are currently waiting for completion you will be able to benefit from the change.