Today (8th July 2020) the Chancellor of the Exchequer, Rishi Sunak has announced that there will be a temporary cut to stamp duty payments up to £500,000 until 31st March 2021, due to the effect of the Covid-19 pandemic on the housing market.
Mr Sunak said that the reasons behind implementing this reduction were that the housing market needed a push to restart. The number of property transactions dropped 50% in May, house prices have decreased and the sector needs a push to get the market moving.
Currently there is no stamp duty payable on the first £125,000 of a property transaction, but from today the threshold will be increased to £500,000 for this temporary period until 31st March 2021. So stamp duty will only be payable on the amount of the transaction above £500,000.
The rates that are payable on the various tranches of the transaction are as follows:
£500,000 to £925,000 – 5% of that portion
£925,000 to £1.5m – 10% of that portion
Anything over £1.5% – 12% of that portion.
You can use our calculator to work out the amount that you need to pay.
Mr Sunak said that, as is usual with stamp duty changes, this will take place immediately.
This means that around 9 out of 10 people will no longer have to pay stamp duty on their property purchase for this interim period.