With the Chancellor’s announcement yesterday on the Stamp Duty Holiday until 31 March 2021 it may now be the time to look at that move you were thinking about next year.

Previously Stamp Duty for Home movers looked like this:

Property or lease premium or transfer value SDLT rate
Up to £125,000 Zero
The next £125,000 (the portion from £125,001 to £250,000) 2%
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%

This meant if you bought a property at the average UK Property Price of £247,000 you would’ve paid Stamp Duty of £2,440 shown as follows:

£0-£125,000 = 0%

£125,001 – £250,000 = 2%

Therefore you pay £0 on the amount of the purchase price up to £125,000 and then pay 2% on £122,000 of the purchase price that falls within the next banding meaning you pay a total of £2,440.

First Time Buyers have had no Stamp Duty to pay since the Government announcement in November 2017. The new Stamp Duty Holiday means Stamp Duty looks like this:

Property or lease premium or transfer value SDLT rate
Up to £500,000 Zero
The next £425,000 (the portion from £500,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%

This means that it’s not only First Time Buyers but Home Movers too who benefit from this Stamp Duty Holiday with (using the previous example) now a saving of up to £2,440 could be made on a £247,00 Purchase.

What about property investors?

The Stamp Duty Holiday Does also benefit property investors too with, much like the original Stamp Duty Banding for home movers, the following rates having been applicable:

Property or lease premium or transfer value Additional Property SDLT rate
Up to £125,000 Zero + 3% = 3%
The next £125,000 (the portion from £125,001 to £250,000) 2% + 3% = 5%
The next £675,000 (the portion from £250,001 to £925,000) 5% + 3% = 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 10% + 3% = 13%
The remaining amount (the portion above £1.5 million) 12% + 3% = 15%

 

This rule applies if you were moving home and NOT replacing your main residence e.g. keeping the previous property as an investment property to move out OR just simply purchasing a new property.

Again using the UK Average Property Price of £247,000 this would’ve resulted in the following SDLT being payable:

£0-£125,000 = 3% = 3% x £125,000 = £3,750

£125,001 – £250,000 = 5% = £122,000 x 5% = £6,100

This means there would’ve been £9,850 in Stamp Duty payable under the old rules.

With the new Stamp Duty Holiday the banding rates look as follows:

Property or lease premium or transfer value Additional Property SDLT rate
Up to £500,000 3%
The next £425,000 (the portion from £500,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%

If we stick with our Standard Pricing used throughout this now means SDLT payable is £247,000 x3% = £7,410 which gives a saving of £2,440!

With savings like that to be made on Stamp Duty and the government giving a deadline of 31 March 2021 is it worthwhile putting off that move?

Get in touch today for a free initial review of your options!