Stamp Duty: Tax Holiday for Homebuyers

Chancellor Rishi Sunak implements a stamp duty 'holiday' for homebuyers.

Stamp Duty Land Tax is the tax paid by property buyers in Northern Ireland and England. Scotland and Wales version of property tax are Land and Buildings Transaction Tax and Land Transaction Tax, respectively. The tax holiday only applies to Stamp Duty payors.

The amount to be paid varies on certain factors. Your location in the UK, the price of the property purchased and whether you are a first-time buyer are factors that have to be considered.

Prior to the Chancellor's announcement, stamp duty was imposed on properties priced above £125,000. But first-time buyers were exempt from this if the purchased a property costing up to £300,000.

Landlords have had to shell out another three per cent stamp duty for properties of buy-to-let in nature.

Important Facts on the Stamp Duty Tax Holiday:

·   The temporary measures will be in place until March 31, 2021

·   Effective immediately, buyers purchasing a property at an amount below £500,000 are exempt from paying stamp duty.

·   For home costing more than £500,000 the following schedule applies:

o  1st £500,000 = 0 per cent

o  Remaining sold price of property up to £925,000 = 5 per cent

o  Homes up to £1.5 million = 10 per cent

o  Homes more than £1.5 million = 12 per cent

·   The tax cut strictly applies for homebuyers who have the date of completion from Wednesday, July 8. Buyers who have already completed unfortunately will lose out.

·   In addition to these measures, the government is set to offer vouchers for homeowners who make energy-efficient changes to their households.

The Treasury believes that these new measures will help 90% of those moving property or getting onto the property ladder this year as this number will pay no stamp duty tax. According to the Chancellor, the homebuyer will save around £4,500 from these changes.