In a widely anticipated move, in the Summer Economic Update the Government announced a temporary change to the stamp duty rules in England and Northern Ireland, which will mean anyone purchasing a main home for under £500,000 will pay no Stamp Duty Land Tax (SDLT).
It was originally thought the SDLT cut would be for six months but in a surprise move, Sunak announced the measure would instead last for nine months.
Prior to the announcement, the stamp duty bill for a £500,000 home purchase was £15,000. This will now be reduced to nil for the first £500,000 and above this level, the following rates will apply:
Property or lease premium or transfer value SDLT rate Up to £500,000 ZeroThe next £425,000 (the portion from £500,001 to £925,0005%The next £575,000 (the portion from £925,001 to £1.5 million) 10%The remaining amount (the portion above £1.5 million) 12%
These rates are temporary and will apply if you purchase a residential main home between 8th July 2020 and 31st March 2021.
It is worth noting that the additional 3% SDLT rate which applies to second property purchases and landlords purchasing additional properties will still apply.
The revised SDLT rates for purchases of additional dwellings are shown below:
Property or lease premium or transfer value 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%
Mr Sunak noted in his update that an estimated 240,000 people are directly employed by housebuilders and their contractors, and between 500,000 and 700,000 employees are indirectly supported in the supply chain. Click here to arrange an appointment to discuss your Mortgage requirements