Breaking News: SDLT Slashed For ALL Buyers
Posted on 9th July 2020
Our team of Property Conveyancing Solicitors are pleased to announce some great news for our residential property purchase clients: SDLT has been slashed by Chancellor, Rishi Sunak, until March 2021.
Our Property Purchase Solicitors have explained below what this change means for our clients.
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What Stamp Duty is currently payable?
Under normal laws, property purchasers who are replacing their main residence (i.e. those who have sold their previous main residential property before or at the same time as their new purchase) will pay Stamp Duty on any amount above £125,000, unless you are a first time buyer. Above £125,000, the amount that you pay will be in increasing portions, with buyers who are purchasing their second properties paying a higher rate.
What do the Stamp Duty changes mean for my purchase?
Well, following Mr Sunak’s announcement today, the Stamp Duty changes mean that the threshold is now £500,000 for all residential buyers. Whether you are a first-time buyer, or buying your second (or third, or fourth) property, the change will affect you, meaning that you will not have to pay any first-rate Stamp Duty on any residential property purchase under £500,000. For those who are buying another property, they will not have to pay the normal Stamp Duty rates, just the additional Stamp Duty of 3% - see our Property Solicitor’s examples below. Even though this could still be an annoyance for those who are buying their second or above properties, the new change at least means that all buyers will be eligible to make a saving.
You can read more about the changes on todaysconveyancer.co.uk.
How will the Stamp Duty change help the property market?
Well, the excellent news is that this change could be a real boost to the property market, helping buyers from all stages of life to get onto the property ladder, or even climb another few rungs, to give a well-needed boost to the economy after the COVID-19 pandemic put a halt to most property transactions.
An Example – Anybody purchasing a first/main property
Our Property Conveyancing Solicitors are here to help you know how this Stamp Duty slash could help you, so we have put together some helpful examples of how this change could affect Stamp Duty payable.
A property purchase for £125,000
Under current laws, there is no Stamp Duty payable on purchases under £125,000, and therefore, these buyers would not be paying any Stamp Duty under new or normal laws.
A property purchase for £200,000
A person buying for £200,00 (providing that they are not first-time buyers) could expect to pay 0% Stamp Duty of the first £125,000. From £125,002 to £200,000, these buyers would usually pay 2%, meaning that they would pay £1,499.98. Under the new rules, these buyers would pay nothing.
A property purchase for £495,000
A person buying a property for £495,000 would usually expect to pay the proportions above (0% up to £125,000 and 2% from £125,001 to £250,000). On any amount over £250,001, the buyers would usually pay 5%. This would mean that, under normal rules, they would be expecting to pay £13,749.93. Under the new rules, they would pay £0 – a staggering saving of £13,749.93!
An Example – Anybody purchasing an additional property
Now our Property Conveyancing Solicitors explain how this Stamp Duty slash will affect those who are buying additional properties, with some helpful examples:
Under normal rules, property buyers would pay 3% on any amount from £0 to £125,000.
Then, they would pay an additional 3% on top of the usual Stamp Duty rate. So, if we take the above values, additional property buyers could expect to pay as follows:
£125,000 - £3,750.00
£200,000 - £7,499.95
£495,000 - £31,099.87
Under the new Stamp Duty Rules, buyers purchasing additional property up to £500,000 will only pay 3% Stamp Duty, meaning that they could expect to pay the following:
£125,000 - £3,750.00
£200,000 - £6,000.00 – a saving of £1,499.95 – almost 20% saved
£495,000 - £14,850.00 – a saving of £16,249.87 – over 50%!
For any purchases over £500,001, up to £925,000, buyers purchasing additional property will need to pay the new rate of 5%, plus the additional rate of 3%.
You can find out the full new rates which are valid until 31st March 2021 on gov.uk, here.
So, whilst buyers purchasing additional property will not be exempt from Stamp Duty, they will still benefit from the new rules. In some cases, they will benefit massively.
How can MG Legal help?
Well, as always, MG Legal are here to help with your property purchase. Contact our expert team of Property Conveyancing Solicitors for a fixed fee quote for your property purchase; you can contact our team online, here, or via email to property@mglegal.co.uk.
Our team are here to help your property purchase is completed in plenty of time to make sure you get all of the advantages of the Stamp Duty slashes.
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