In his latest economic update the chancellor has announced that properties under £500,000 can temporarily be purchased free of Stamp Duty in England and Northern Ireland.
Prior to the announcement, the threshold for Stamp Duty was £125,000 (£300,000 for First Time Buyers
). The announcement of the higher threshold, which begins immediately and will be in place until 31 March 2021, is the latest move from the government to mitigate the economic impact of the coronavirus pandemic.
Rishi Sunak stated that the holiday would cut the average Stamp Duty bill by £4,500 and would leave nearly 90% of people buying a main home this year with no Stamp Duty to pay at all. You can read our analysis of how First Time Buyers in different regions of the UK will benefit from it
(although the changes apply both to First Time Buyers and those who have owned properties before).
If you’re buying a second home or a buy to let
property in England or Northern Ireland, you can enjoy a discounted rate of 3% for properties up to £500,000, and then normal rates apply for anything above that.
The Scottish Finance Secretary Kate Forbes has announced a similar holiday for property tax in Scotland, known as Land & Buildings Transaction Tax (LBTT). Whilst the current threshold for paying LBTT is £145,000, it will be raised to £250,000 to enable eight out of ten property sales in Scotland to be carried out tax-free
. However, unlike England and Northern Ireland's Stamp Duty holiday, this change will not take place immdiately, although Kate Forbes said it will come into force as soon as possible.
The thresholds for Welsh property tax, known as Land Transaction Tax, currently remain unchanged.
If you’re not sure how much Stamp Duty you’ll need to pay you can use our Stamp Duty Calculator
. The calculator currently takes the changes in England and Northern Ireland into account, and will be updated again once the Scottish changes are implemented.