What do the upcoming Stamp Duty changes mean for my purchase?
Since the start of the “stamp duty holiday” in July 2020, Leathes Prior has seen a record number of property transactions as we approach the 30th June deadline. Whilst the stamp duty rates will change as of 1st July, you will still be able to take advantage of the savings if you are looking to move home or purchase an investment property after the 1st July.
Until 1st June, stamp duty is charged at 0% for the first £500,000, meaning there is no stamp duty payable for home movers, providing the purchase price is under £500,000. Between the 1st July and the 30 September the figure on which there is no stamp duty payable will reduce to £250,000.
This means that for a purchase price of £500,000 the stamp duty payable is currently £0. After the 1st July this will rise to £12,500 and following the 1st October this will rise again to £15,000.
The savings on stamp duty will be most significant for properties which are below the £250,000 threshold or close to this. For example, if you are looking to purchase a property at £300,000 the stamp duty is currently nil. Following the 1st July this will be £2,500 and will then be £5,000 from the 1st October. If you are looking to move home and your budget is below £250,000 or close to this, you could potentially save as much as half the amount of Stamp Duty you would have ordinarily paid.
How will the upcoming changes apply if you are looking to purchase a second property or investment property?
If you are buying a second property currently you will still need to pay the additional 3% surcharge.
This means that the stamp duty currently payable for an investment property purchased at £500,000 would be £15,000. This will rise to £27,500 from the 1st July and then to £30,000 after the 1st October.
Again if you are looking to purchase a property which is valued at £250,000 or close to this there can be significant savings. There is a similar saving of £2,500 from completing your purchase between July and September, with the amount payable rising from £7,500 to £10,000. This means a saving of around a quarter of the amount you would normally pay.
Whilst June is looking to be a very busy month for clients who have already instructed us for their purchases, our Residential Property Team continue to assist new clients looking to complete after 1 July, to start your transaction, contact the team via email or call 01603 610911