Recently, the chancellor announced a temporary holiday on stamp duty which could have a positive financial effect on all of us here in England and Northern Ireland. What is the new stamp duty holiday, what does it cover and what is it all about? We are going to answer all of those questions and more so keep reading.
The temporary holiday on stamp duty covers the first £500,000 of all property sales in England and Northern Ireland. This means that the increase in the tax threshold, which is in effect until next March, could give the property market a significant boost, making it easier for struggling buyers.
What Is Stamp Duty?
For those unfamiliar with the term, stamp duty is ‘a tax paid by people buying properties in the UK. And, although it does vary across the UK, it is essentially a property tax. In England and Northern Ireland, it is called Stamp Duty Land Tax, and in Scotland, it is called Land and Buildings Transaction Tax. However, if you are from Wales, you would call it Land Transaction Tax.
What Has Changed?
So, just what exactly has changed with the stamp duty tax and how will it affect you? The temporarily increase in stamp duty threshold is in effect until 31 March 2021, and anyone completing a sale on a main residence costing up to £500,000 between now and 31 March will not pay stamp duty. If the main residence that you purchased costs more than £500,000, the property will be taxed on the value above that amount.
What About Scotland And Wales?
What about Scotland and Wales? They seem to have been left out. Not really. In fact, in Scotland, the rates on Land and Buildings Transaction Tax are 2% on £145,001-£250,000, 5% on £250,001-£325,000, 10% on £325,001-£750,000, and 12% on any value above £750,000. And in Wales, the rates on Land Transaction Tax are 3.5% on £180,001-£250,000, 5% on £250,001-£400,000, 7.5% on £400,001-£750,000, 10% on £750,001-£1.5m, and 12% on any value above £1.5m.
While this is good news for home buyers, according to HM Revenue and Customs (HMRC), the UK government stands to lose around £3.8bn for the nine-month stamp duty holiday.
Contact Trevlyn Properties
To learn more reasons why property experts believe it’s a buyer’s market, contact Trevlyn Properties today and speak with an estate agent who can answer any questions you might have.
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