Stamp Duty Land Tax changes
Wednesday, 15 July 2020
Stamp Duty Land Tax (SDLT) for residential properties has temporarily changed following last week’s exciting announcement by Chancellor of the Exchequer, Rishi Sunak.
Mr Sunak announced that from now until 31 March 2021, most purchasers will only pay Stamp Duty Land Tax if buying a property for more than £500,000. This means the average SDLT bill will fall by £4,500. Nearly nine out of ten people buying a main home during this period will pay no SDLT at all.
This temporary change should lead to a flurry of activity in the market. Instead of people needing to save additional money to cover Stamp Duty costs, they can now put this towards a deposit.
What’s more, SDLT is paid after a purchase has completed. This means that anyone who is part-way through buying a property will benefit from this temporary change.
It’s not only first-time buyers and homeowners who are looking to move that can benefit during the next few months. An investor spending £250,000 on a property will save £2,500, while one spending £500,000 will save £15,000. Again, this will be welcome news given the second home surcharges and higher rates for additional dwellings rules that the Government introduced back in 2016 to specifically target this demographic. (It should be noted that the 3% surcharge still applies on the purchase of a second property.)
The move will hopefully provide a much-needed boost for the housing market and should also have a knock-on effect to stimulate other areas of the economy as industries such as painters/decorators, electricians, DIY shops, furniture shops and more will feel the benefit.