In a bid to rejuvenate the UK property market, Government chancellor Rishi Sunak announced a stamp duty holiday for homebuyers in England and Northern Ireland on the 8th July 2020.
Responding to a significant dip in property sales since the arrival of the coronavirus, the ‘holiday’ means that property sales up to £500,000 will now be exempt from the stamp duty land tax charge. The chancellor intends to increase confidence in the housing market with this tax relief, with the aim of encouraging home buying and renovations.
Starting on the 8th July 2020, the stamp duty threshold will be increased to £500,000 until the 31st March 2021. Stamp duty rates will then revert to normal from the 1st April 2021.
What is stamp duty?
Stamp duty is a tax paid on UK property purchases.
It goes by different names in the different regions of the UK, and the amount paid varies depending on your location and how much the property costs.
| Region | Stamp Duty |
| England and Northern Ireland | Stamp Duty Land Tax (SDLT) |
| Scotland | Land and Buildings Transaction Tax |
| Wales | Land Transaction Tax |
Stamp duty is usually added to property purchases over £125,000. For first time buyers, it usually only applies to properties over £300,000.
The current stamp duty changes only apply to house-buyers in England and Northern Ireland.
Who Stands to Benefit?
From the 8th July, completed house sales on a main residence up to £500,000 will be free of stamp duty, with the potential for saving up to £15,000 in tax fees.
Here’s a handy breakdown of tax rates based on the property value:
| Property value | Tax percentage |
| Less than £500,000 | None |
| £500,001 to £925,000 | 5% |
| £925,001 to £1.5 million | 10% |
| over £1.5 million | 12% |
The average stamp duty bill will fall by £4,500, with nearly nine out of 10 people buying a main home this year paying no stamp duty at all.
The GOV.UK website has a tool to help you calculate Stamp Duty Land Tax for your property.
Buy to let properties and second homes will still have the 3% higher rate on purchases, but will also qualify for the new tax break.
If you started the house buying process but haven’t completed before the 8th July, you can still benefit from the stamp duty holiday. Stamp duty is only payable after exchanging contracts and completing the sale.
If you want to make the most of the stamp duty holiday, the solicitors at Nyland and Beattie in Widnes can help you get started with the house buying process. Call our property and conveyancing solicitors today on 0151 424 5656 for an informal chat and expert advice.