Last week, the Chancellor Rishi Sunak announced a range of changes to help stimulate the economy. One of the headline changes, related to Stamp Duty with a temporary overhaul to help boost the housing market. With immediate effect, buyers in England and Northern Ireland are now exempted from paying stamp duty on properties worth £500,000 or less (previously stamp duty was paid on most properties over £125,000). It is thought that this change will affect around 90% of buyers, with an average saving of £4,500. This temporary measure will last until 31 March 2021.
But do these changes apply to everyone?
The good news is that this applies to everyone buying properties in England and Northern Ireland, including property investors purchasing a second property or buy to lets. It also applies if you are acquiring a property through a Limited Company.
This was welcome news for many who have been delaying buying property due to uncertainty in the housing market.
For second home buyers, the additional 3% surcharge will still apply but they will still save on the base rates paid by those owning one property. On a property worth £500,000, this saving is worth £15,000.
It is hoped that this will help to get the property market moving again and as a consequence boost the economy.
Please note, that there are many other considerations that you may need to think about, in particular if you are looking to acquire investment property.
There changes only apply to properties in England and Northern Ireland. Properties in Scotland and Wales fall into a different regime.
If you need any advice on the tax implications surrounding property transactions, please contact us at Richardsons and we will be able to assist.