Changes in Stamp Duty - What Does it Mean for Me?
After the UK Government’s announcement that they’re temporarily reducing Stamp Duty Land Tax in England and Northern Ireland, you may be wondering how this affects you if you’re looking to buy or sell a property.
The changes came into effect on 8th July and will be in place until 31st March 2021.
If you’d like advice about Stamp Duty and how this impacts you, get in touch with one of our Conveyancing Solicitors who will be happy to discuss this with you. We’re also offering our Conveyancing clients £100 cashback and a free online Will to help you with your move, so ask us for details.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax (SDLT) is a tax that you must pay if you’re buying property or land over a certain price in England or Northern Ireland.
Previously, the threshold for SDLT was £125,000 for residential properties and £150,000 for non-residential properties. But the temporary changes mean that you’ll only pay SDLT on a property if it’s valued over £500,000.
Let’s look at how it may impact different types of buyers and sellers.
If You’re Moving Home
For those looking to move home, the tax reduction is likely to come as a welcome relief, as the money you would have been putting towards SDLT could instead go towards other things like house renovations.
If you’ve been looking at properties that are slightly over your original budget, this extra saving may even sway you to increase your budget when looking for your new property.
If You’re a First-Time Buyer
First-time buyers are also likely to benefit from the Stamp Duty changes. When you’re already saving a large sum of money for a deposit, paying Stamp Duty on top of that can feel like yet another big expense. So this tax relief will help new buyers save money that they can put towards their house deposit instead.
But one thing both first-time buyers and those moving home need to bear in mind is that house prices could increase if sellers decide to raise their prices in response to the Stamp Duty changes. Even if this is the case, you’re still looking at a significant saving.
If You’re Buying a Second Property
The SDLT changes don’t apply to those looking to buy a second property or Buy-to-Let, but you will still benefit from reduced rates during this time. This means that you’ll now pay the following rates of tax:
- 3% on properties up to £500,000
- 8% on properties valued at £500,001 to £925,000
- 13% on properties valued at £925,001 to £1.5m
- 15% on anything above £1.5m
More information on the updated Stamp Duty Land Tax thresholds can be found on the gov.uk website.
Our Conveyancing Solicitors can also advise you if you’re still unsure about this.
What if I Live in Wales?
If you live in Wales, you instead pay something called Land Transaction Tax, which replaced Stamp Duty Land Tax in April 2018. The Welsh Government are offering tax reductions for home buyers but this doesn’t come into effect until 27th July and varies slightly to the changes in Stamp Duty tax.
The changes mean that no one will pay Land Transaction Tax on properties valued between £180,000 and £250,000 (properties under £180,000 are already exempt from paying tax).
Those buying second homes or Buy-to-Let properties will still have to pay Land Transaction Tax as well as their normal tax rate, which is:
- 3% of the value of a property priced at £180,000 or lower
- 5% on the value of a property between £180,000 and £200,000
You can find out more about Land Transaction Tax on the gov.wales website.
Get Cashback and a Free Online Will
If you’re keen to take advantage of the Stamp Duty reductions and you want to get through the Conveyancing process as quickly as possible, you might be interested in our current offer. This is open to both new and existing clients, and to both those buying and selling a property.
- £100 cashback if you complete within 3 months, or 4 months if you’re buying a new build or a leasehold property
- A free online Will through our partner Bequeathed
Get in touch with our Conveyancing Solicitors to get a Free Fixed Fee Conveyancing Quote and find out more about this offer.
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