Stamp Duty Changes July 2020
At Prestige & Village, we are fully committed to providing you with the highest standard of service at all times. We know the importance of making an informed decision in the housing market, and we are here to offer support and assistance at all times.
If you are looking for guidance on what the recent stamp duty change means to you, and the housing market, we are here to assist you.
On Wednesday 8th July, the Chancellor of the Exchequer, Rishi Sunak, has announced an increase in the stamp duty threshold in the Summer Update. The key points of the stamp duty changes are:
For the stamp duty holiday, the Stamp Duty Land Tax (SDLT) is as follows:
- When the property price is up to £500,000 – the SDLT is Zero
- For the portion of property price from £500,001 to £925,000 – the SDLT is 5%
- For the portion of property price from £925,001 to £1.5 million – the SDLT is 10%
- For any portion above £1.5 million – the SDLT is 12%
Why has the SDLT changed?
The change has been brought about in reaction to the COVID-19 pandemic, and how it has affected the housing market and property buyers. The new threshold will hopefully help buyers lower the cost of buying a home, making the process more affordable.
How much could a buyer save?
No matter the price of property you plan on buying, there is a strong chance you will save money with the introduction of the stamp duty holiday.
If you are not a first-time buyer, the impact of the stamp duty holiday can be seen as follows:
- For a £300,000 property, the SDLT was previously £5,000 but for now, there is no stamp duty to pay
- For a £400,000 property, the SDLT was previously £10,000 but for now, there is no stamp duty to pay
- For a £500,000 property, the SDLT was previously £15,000 but for now, there is no stamp duty to pay
- For a £600,000 property, the SDLT was previously £20,000 but for now, the stamp duty is £5,000
This pattern continues, with all purchases of £500,000 and above saving the buyer in £15,000 in reduced SDLT fees.
Mark Hayward, Chief Executive, NAEA Propertymark, comments: “Following our engagement with HMT and MHCLG over the past few months, we welcome the Chancellor’s announcement this afternoon that he will be raising the threshold at which buyers will pay stamp duty to £500,000. This is a welcome commitment by the government and we are glad that they have listened to our calls to help sustain the property market following lockdown.”
Mark continued by saying; “These measures will enable people looking to buy a home to have the confidence and stability to be able to move forward with their purchase, which in turn will have a knock-on effect on the wider economy as people buy white goods and furniture. The market is moving well at the moment, however, once furlough has ceased and the anticipated recession hits, the market might well need further financial impetus, therefore it is right that the sector is given the support and tools it needs to rebound over the next 9 months.”
The British property Federation released a statement, saying; “A temporary SDLT holiday will provide a welcome boost to the build-for-sale market, but other parts of the market equally need further support. To drive the delivery of new, high-quality rental homes, the Chancellor missed a trick today by not giving investors in the build-to-rent sector an exemption from the SDLT 3% surcharge.”
At Prestige & Village, we care about our community, and supporting others. We aim to provide you with as much help and assistance as we can. If you have any property or housing questions, please feel free to contact us today.
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