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Stamp Duty Holiday: How Does it Work and How Will it Affect Homebuyers?
Yesterday the Chancellor announced a welcomed ‘holiday’ on stamp duty payments expected to save homebuyers an average of £4,500 and help keep the property market moving.
Under the changes announced, homebuyers will no longer pay tax on the first £500,000 (raised from £125,000) in England and Northern Ireland when purchasing a main residence. Jessica Inkpen, Conveyancer in our Residential Property Team looks into what Stamp Duty is and how it will be affecting homebuyers going forward.
What is Stamp Duty Land Tax?
Stamp Duty is a tax payable by homebuyers purchasing a property in England and Northern Ireland. The amount of Stamp Duty due depends on the price of the property and is payable on both Freehold and Leasehold properties.
What does this mean for Homebuyers?
Any homebuyer who is purchasing a main residence up to the value of £500,000 will not pay any Stamp Duty until 31 March 2021 with immediate effect.
Any homebuyer who is purchasing a property over £500,000 will still pay Stamp Duty but this will be a reduced amount under the changes announced.
The amount of Stamp Duty due can be calculated using this useful calculator; https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro
What about Homebuyers purchasing a second home or an investment property?
The holiday will also benefit homebuyers purchasing second homes / investment properties however homebuyers but will still have to pay the second-home surcharge that was charged under the previous rules.
What if Homebuyers have already Exchanged Contracts?
As Stamp Duty is payable on completion, if homebuyers have already exchanged but not yet completed, they will benefit from the Stamp Duty holiday.
For more information on Residential Property Conveyancing you can visit here. To get in contact with our team please fill in the form in the sidebar of this page. Alternatively, you can call us on 01453847200.
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