Chancellor Rishi Sunak today confirmed an immediate rise in the stamp duty threshold to £500,000, in a fresh bid to stimulate the housing market following the coronavirus lockdown.
Mr Sunak had been widely expected to offer buyers a stamp duty ‘holiday’ as part of his mini-budget announcement.
The Chancellor revealed the cut in stamp duty would be in place until March 31 2021, with all buyers exempt from paying stamp duty on the first £500,000 of the purchase price.
Previously, stamp duty applied to properties costing £125,000 or more for all buyers other than first-timers.
First-time buyers were already exempt from stamp duty on the first £300,000 of a property’s purchase pruce, but Mr Sunak’s announcement is a shot in the arm for those at the higher end of the market, who will now enjoy substantial savings.
Landlords, meanwhile, will only pay the additional 3% surcharge on buy-to-let properties or second homes costing up to £500,000, having previously paid the old residential rates and the surcharge on top.
That means a landlord purchasing a buy-to-let property for £300,000 would pay £9,000 in stamp duty rather than £14,000.
A buy-to-let property costing £500,000, meanwhile, would command £15,000 in stamp duty compared with £30,000 before the threshold was raised.
The stamp duty holiday will apply to property purchases in England and Northern Ireland only.