Recently the Chancellor Rishi Sunak has announced that the Stamp Duty threshold will be increased to £500,000 as of July 8th 2020 until 31st March 2021.
The government is increasing the ‘nil’ rate band of residential stamp duty in England and Northern Ireland from £125,000 to £500,000 on a temporary basis. Statistics show that nearly 9 out of 10 people joining the property ladder or moving up it will not pay any stamp duty at all. The purpose of this is to help the UK recover from the consequences of the recent pandemic, COVID19. The property market closed from late March to mid May. Recent statistics on some of the biggest property websites show that there are more than 510,000 properties with asking prices under £500,000 on the portal, making up 80% of all residential stock for sale in England. On the UK property website Right Move, there are 291,000 under £500,000 currently available for sale, making up 78% of all properties listed in England. 84% of all buyer enquiries in England currently are made up of those people who enquire with Right Move about under £500,000 properties.
For example the average home currently costs £248,000 - with the changes made by Rishi Sunak you would save £2,460 in stamp duty costs when purchasing a home of this known value.
Before the announcement, stamp duty in England and Northern Ireland was paid on land/properties that were sold for £125,000 and over. Unless you were a first time buyer as they paid no tax up to £300,000 and only 5% on any property between £300,00 to £500,000. Second home buyers and investors will also benefit from the change but will still have to pay the 3% extra duty tax due on the entire price.
The governments annual take from stamp duty is around £12 billion according to the latest figures released from HMRC. That is almost 2% of the Treasuries total tax take in a whole year.