Sunday Thoughts: Stamp Duty
Sun 12 Jul 2020
This week’s announcement by the Government to temporarily reduce Stamp Duty Land Tax for residential properties purchased between the 8th July and 31st March, 2021 should be welcomed with open arms.
If you buy a property between these dates as your main/only residence you will not pay Stamp Duty if your purchase is below £500,000.
The new temporary rates apply whether you are a first-time buyer or have owned property before.
If you spend between £500,001 and £925,000 you will pay 5% Stamp Duty on the portion over the £500,000.
If you spend between £925,001 and £1,500,000 you will pay 10% Stamp Duty on the portion above the £1.5 million.
So, for instance
If you are a first-time buyer spending less than £500,000 there is no stamp duty to pay.
If you are moving house and replacing your main residence and you are spending less than £500,000 – there is no stamp duty to pay.
If you are buying a fabulous house at £695,000 like our “Ramillies” property for instance, you will pay £9,750 in Stamp Duty.
This is made up of the first £500,000 being free and the portion between £500,001 - £695,000 being charged at 5% = £9,750.00
as long as you complete before 31st March, 2020.
If you don’t complete on the purchase until after 31st March, 2021, when the temporary relief ends and Stamp Duty Land Rates revert back to pre-8th July rates you will pay …
Up to £125,000 – free
Portion between £125,001 - £250,000 – 2%
Portion between £250,001 - £925,000 – 5%
You will pay £24,750.00
So, if you are considering purchasing a ‘high-end’ property in the near future, now is the time to do it.
Savings of £15,000 are certainly worth having.
If you are considering selling a ‘high-end’ property, now is the time to get it on the market.
It might not make your house worth more money but it will certainly make your home easier to sell as buyers won’t need extra cash in the bank to help fund their purchase.
Landlords and Landladies
If you are looking to buy an additional property – i.e. if you are a landlord/landlady looking to purchase another rental property you are also going to benefit as you too, no longer have to pay the standard rates, but you do have to pay the 3% additional rate for the same period.
i.e. up to £500,000 – 3%
£500,001 - £925,000 – 8%
£925,001 – £1,500.000 – 13%
Above £1,500,000 – 15%
So, if you buy a property @ £150,000, like our lovely ‘Shire Green’ property for instance, the Stamp Duty Land Tax will be £4,500, so long as you complete the transaction before 31st March, 2021.
After that it will revert to the pre-8th July figures and you will pay £5,000 in SDLT.
Up to £125,000 - 3%
Above £125,000 & up to £250,000 – 5%
Above £250,000 & up to £925,000 – 8%
Above £925,000 & up to 1,500,000 – 13%
Above £1,500,000+ - 15%
Either way, you have the next 7/8 months to make good use of the Governments latest help for homebuyers.
If you would like an idea of what your home could be worth, please take a look at our instant online house valuation tool half way down the home page on our website.
If you would like Charlotte to come out and visit your home and give you a more detailed and in-depth price guide, there is a valuation request button at the top of the website home page.
You can always pick up the telephone and give us a call on 01757 709955.
We are asking people not to pop in to our offices for a chat at the moment as we are doing our best to protect ourselves and yourselves from the spread of Coronavirus.
Happy Sunday Everyone
Carol