Temporary stamp duty exemption for properties under £500,000
The chancellor, Rishi Sunak has introduced a temporary stamp duty exemption on transactions of up to £500,000. The change was announced in his summer statement on Wednesday 8 July, and came into force that day. The stamp duty holiday will last until 31 March 2021, and is aimed at stimulating the housing market.
Previously, the threshold at which homebuyers started paying stamp duty was set at £125,000. Buyers paid 2% on the next £125,000 (up to £250,000) and 5% on the following £675,000 up to £925,000. First-time buyers did not pay the tax on transactions below £500,000 in London, or £300,000 elsewhere in England.
The threshold for all buyers has now been increased to £500,000. Homes costing more than £500,000 will attract a 5% rate, which will apply to the part of the sale up to £925,000.
The change will apply to second homes and additional properties as well as to the main residence, meaning buy-to-let will be cheaper for landlords, in spite of the 3% stamp duty surcharge, which remains in place.
The tax holiday is one of a number of moves to kickstart the economy, as the UK emerges from the coronavirus pandemic. Other measures include a temporary cut to the rate of VAT on hospitality and tourism, from 20% to 5%.
The chancellor launched his “eat out to help out” scheme, which offers diners 50% off their bill up to a maximum of £10, Mondays to Wednesdays in August.
And Mr Sunak announced that £2 billion has been allocated to the Green Homes Grant scheme which will offer homeowners up to £5,000 in vouchers to fund energy-efficient improvements.
At the beginning of lockdown, homebuyers were told to put their moving plans on hold. Lifting the restrictions saw a flurry of interest in homes to buy and rent in London, but the property market has remained sluggish in some areas.
Read more about this story in the Guardian