You will have seen in the media and from our social media posts that stamp duty has changed recently. However, you may be wondering what that actually means for you. If you haven’t bought a home before you may not even be aware of stamp duty. This is what we want to look at in this blog post.
What Is Stamp Duty?
Stamp duty is a land tax. It is a lump-sum, tax that anyone buying a property or piece of land costing more than a set amount will have to pay. Based on the type and cost of land or property you are buying, the cost of stamp duty will change.
How Much Is Stamp Duty?
Under the current system in England, where the new changes will apply, if you are buying a property as your main residence, the stamp duty costs will be as follows;
- For properties purchased for up to £125,000 there will be no stamp duty tax.
- For properties purchased between £125,001 and £250,000 stamp duty will be an additional 2% of the cost of the property.
- For properties purchased between £250,001 and £925,000 stamp duty will be an additional 5% of the cost of the property.
- For properties purchased between £925,001 and £1,500,000 stamp duty will be an additional 10% of the cost of the property.
- For properties purchased over £1,500,001 stamp duty will be an additional 12% of the cost of the property.
However, if you are a first time buyer in England the stamp duty tax is different. The government have changed this for first time buyers to help get them on the housing ladder. First time buyers purchasing a property up to £500,000 will pay no stamp duty on the first £300,000. They will then pay 5% stamp duty on any portion between £300,001 and £500,000. If the property is worth more than £500,000 and you are a first time buyer, the costs as above will stand.
What Has Changed?
Further to the coronavirus outbreak and subsequent lockdown, the government have created what is referred to as a ‘stamp duty holiday’. This means that nobody will pay stamp duty when purchasing a home up to the value of £500,000.
How Much Money Will This Save Home Buyers?
Under this temporary measure, the higher value your home, the more you will save. The chancellor has said that the average saving will be around £4,500 per home buyer. The maximum that could be saved by a buyer is £15,000.
Want to know more? Call our team of friendly and experienced estate agents in Peterborough.