How much do you know about the stamp duty holiday?
Stamp Duty Land Tax (SDLT) is a tax you pay when you buy a property or land over a certain price in England and Northern Ireland usually made via your solicitor within 14 days of completion of the purchase. The ‘threshold’ is where SDLT starts to apply. If you buy a property for less than the threshold (previously £125,000), there’s no SDLT to pay.
At the Summer Statement in July, Chancellor Rishi Sunak announced that the threshold at which stamp duty applies will be raised from £125,000 to £500,000 in England and Northern Ireland, meaning buyers can get on the ladder or move homes at a significantly lower cost.
If you are looking to buy a property that is above £500,000 in price you can still benefit from this stamp duty holiday!
Answering a question on how the tax works, Martin Lewis said: “It applies to anybody buying a house, whether you are a first-time buyer or upgrading your home - you won’t pay stamp duty on the first £500,000 of a property.
“The biggest gain is for those buying properties above £500k because of the way stamp duty works. The first £500,000 of a property - no one pays anything. Then from £500 to £925k you pay five percent on that bit, above that to £1.5 million you pay 10 percent, and over that you pay 12 percent.”
A family of four, selling a 3 bedroom terrace home, looking to buy a four bedroom detached home for £600,000 will pay just £5000 stamp duty land tax if they buy now and the sale is complete before March 31st 2021. If they complete after this date the threshold will have changed and they will pay £20,000 in SDLT!
The new threshold, which also applies to investors, will run until the end of March 2021 and the threshold from 1st April 2021 will return to just £125,000. The timeline for purchasing a property can take anywhere between one and six months meaning now is THE time to make the move and don’t miss out on saving thousands of pounds!