In the video below Ollie Henson explains that on Wedesday 8th July, the Chancellor announced that homebuyers in England and Northern Ireland will not be liable for stamp duty on the value of homes up to £500,000, with immediate effect, up until the end of March next year.
This means the thresholds are now as follows:
- 0% on properties purchased for up to £500,000
- 5% on the portion between £500,001 and £925,000
- 10% on the portion between £925,001 and £1,500,000
- 12% on the portion costing more than £1,500,001
(Up until the 8th July the threshold where you'd start paying stamp duty was £125,000 - or £300,000 for first-time buyers if buying a property worth less than £500,000.)
You can see that for properties costing more than £500,000, the stamp duty bands are unchanged – however, you will still make a saving of £15,000 on the first £500,000.
What does it mean for me?
So if you're buying a property under the new £500,000 threshold you pay nothing in stamp duty.
If you buy a property over this amount, just take £15,000 off what you would have paid before this announcement was made (£10,000 if you're a first-time buyer).
So for example, if you buy a house worth £650,000 you'd now pay £7,500 in stamp duty (5% of the £150,000 above the threshold). Previously there would have been an additional £15,000 in stamp duty.
Legal payment of stamp duty is triggered when you complete the purchase of your property. So if you exchanged before Wednesday 8th July, but have not yet completed, you will be able to benefit from the new rules.
What about buying additional properties?
The standard 3% levy that has to be paid if you already own a home and are buying an additional property worth more than £40,000 still applies. You do still benefit from the reduced stamp duty costs outlined above though, so your overall cost is reduced.
Please call us now if you would like to discuss how these changes affect your home buying or selling decision, or contact our trusted partner, Assured Mortgage Advice.
The full Government information is available on the HMRC website.
* The above rules apply in England and Northern Ireland.