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| Stamp duty holiday: How will it work? | Stamp duty holiday: How will it work? |
| (30 minutes later) | |
| The chancellor has announced a temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland. | The chancellor has announced a temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland. |
| The level at which the tax is charged has been temporarily raised until next March to £500,000 to boost the property market and help buyers struggling because of the coronavirus crisis. | The level at which the tax is charged has been temporarily raised until next March to £500,000 to boost the property market and help buyers struggling because of the coronavirus crisis. |
| The changes have come in with immediate effect. | The changes have come in with immediate effect. |
| What is stamp duty? | What is stamp duty? |
| Stamp duty is a tax paid by people buying properties, although it varies slightly across the UK. | Stamp duty is a tax paid by people buying properties, although it varies slightly across the UK. |
| In England and Northern Ireland buyers pay Stamp Duty Land Tax. | In England and Northern Ireland buyers pay Stamp Duty Land Tax. |
| In Scotland it is Land and Buildings Transaction Tax, while in Wales buyers pay Land Transaction Tax. | In Scotland it is Land and Buildings Transaction Tax, while in Wales buyers pay Land Transaction Tax. |
| The amount handed to the government depends on where you are in the UK, the price of the property and whether you're a first-time buyer. | The amount handed to the government depends on where you are in the UK, the price of the property and whether you're a first-time buyer. |
| The expected changes to stamp duty will only apply to buyers in England and Northern Ireland. | The expected changes to stamp duty will only apply to buyers in England and Northern Ireland. |
| Who pays stamp duty and how much? | Who pays stamp duty and how much? |
| In England and Northern Ireland stamp duty is paid on land or property sold for £125,000 or more. | In England and Northern Ireland stamp duty is paid on land or property sold for £125,000 or more. |
| However, first-time buyers pay no tax up to £300,000 and 5% on any portion between £300,000 and £500,000. | However, first-time buyers pay no tax up to £300,000 and 5% on any portion between £300,000 and £500,000. |
| For people who have bought a home before, stamp duty rates are 2% on £125,001-£250,000, 5% on £250,001-£925,000, 10% on £925,001-£1.5m, and 12% on any value above £1.5m. | For people who have bought a home before, stamp duty rates are 2% on £125,001-£250,000, 5% on £250,001-£925,000, 10% on £925,001-£1.5m, and 12% on any value above £1.5m. |
| That means someone spending £248,000 - the average cost of a house - would currently pay £2,460 in stamp duty to move home. | That means someone spending £248,000 - the average cost of a house - would currently pay £2,460 in stamp duty to move home. |
| Landlords pay an extra 3% of stamp duty when they purchase a buy-to-let property in England and Northern Ireland. | Landlords pay an extra 3% of stamp duty when they purchase a buy-to-let property in England and Northern Ireland. |
| What has changed? | What has changed? |
| The government has increased the lower stamp duty threshold to £500,000 for property sales in England and Northern Ireland. | The government has increased the lower stamp duty threshold to £500,000 for property sales in England and Northern Ireland. |
| That means any property purchases below the new level will not need to pay stamp duty as long as the deal is completed before 31 March 2021. | That means any property purchases below the new level will not need to pay stamp duty as long as the deal is completed before 31 March 2021. |
| People buying second homes and buy-to-let properties will also benefit, but will still have to to pay the 3% extra duty due on the entire price. | People buying second homes and buy-to-let properties will also benefit, but will still have to to pay the 3% extra duty due on the entire price. |
| The move is aimed at helping buyers who have taken a financial hit because of the coronavirus crisis. | The move is aimed at helping buyers who have taken a financial hit because of the coronavirus crisis. |
| It is also intended to boost a property market hit by lockdown. According to the Halifax, house prices have fallen for four months in a row. | It is also intended to boost a property market hit by lockdown. According to the Halifax, house prices have fallen for four months in a row. |
| Chancellor Rishi Sunak said: "The average stamp duty bill will fall by £4,500. And nearly nine out of 10 people buying a main home this year, will pay no stamp duty at all." | Chancellor Rishi Sunak said: "The average stamp duty bill will fall by £4,500. And nearly nine out of 10 people buying a main home this year, will pay no stamp duty at all." |
| When will the stamp duty holiday happen? | When will the stamp duty holiday happen? |
| It is effective immediately from Wednesday and will last until 31 March next year. | It is effective immediately from Wednesday and will last until 31 March next year. |
| The increase will be temporary to help revive the flagging property market. | The increase will be temporary to help revive the flagging property market. |
| However, critics worry it could encourage people planning to buy next year to accelerate their plans to take advantage of the tax break, leading to a potential property demand slump when the stamp duty holiday is over. | However, critics worry it could encourage people planning to buy next year to accelerate their plans to take advantage of the tax break, leading to a potential property demand slump when the stamp duty holiday is over. |
| Can I still benefit if I've already completed a purchase? | Can I still benefit if I've already completed a purchase? |
| The holiday applies from 8 July, which means anyone completing a property purchase before that date will have to pay the full normal stamp duty. | The holiday applies from 8 July, which means anyone completing a property purchase before that date will have to pay the full normal stamp duty. |
| How much could a buyer save? | How much could a buyer save? |
| The more you pay - up to the new £500,000 threshold - the more you could save on stamp duty. | The more you pay - up to the new £500,000 threshold - the more you could save on stamp duty. |
| Before the stamp duty holiday, if you bought a house for £275,000, for instance, the stamp duty you'd have had to pay would have been £3,750. | Before the stamp duty holiday, if you bought a house for £275,000, for instance, the stamp duty you'd have had to pay would have been £3,750. |
| That's based on 0% duty on the first £125,000, 2% on the next £125,000 (£2,500), plus 5% on the final £25,000 (£1,250). | That's based on 0% duty on the first £125,000, 2% on the next £125,000 (£2,500), plus 5% on the final £25,000 (£1,250). |
| The holiday means anyone buying a home in Bramhall, Stockport would save £13,603 in stamp duty, based on Rightmove estimates of an average asking price of £472,053. | The holiday means anyone buying a home in Bramhall, Stockport would save £13,603 in stamp duty, based on Rightmove estimates of an average asking price of £472,053. |
| What about Scotland and Wales? | What about Scotland and Wales? |
| In Scotland, the rates on Land and Buildings Transaction Tax are 2% on £145,001-£250,000, 5% on £250,001-£325,000, 10% on £325,001-£750,000, and 12% on any value above £750,000. | In Scotland, the rates on Land and Buildings Transaction Tax are 2% on £145,001-£250,000, 5% on £250,001-£325,000, 10% on £325,001-£750,000, and 12% on any value above £750,000. |
| Scottish landlords pay an extra 4% Land and Buildings Transaction Tax on top of standard rates. | Scottish landlords pay an extra 4% Land and Buildings Transaction Tax on top of standard rates. |
| In Wales, the rates on Land Transaction Tax are 3.5% on £180,001-£250,000, 5% on £250,001-£400,000, 7.5% on £400,001-£750,000, 10% on £750,001-£1.5m, and 12% on any value above £1.5m. | In Wales, the rates on Land Transaction Tax are 3.5% on £180,001-£250,000, 5% on £250,001-£400,000, 7.5% on £400,001-£750,000, 10% on £750,001-£1.5m, and 12% on any value above £1.5m. |
| Welsh landlords pay an extra 3% Land Transaction Tax on top of standard rates. | Welsh landlords pay an extra 3% Land Transaction Tax on top of standard rates. |
| How much does stamp duty raise? | How much does stamp duty raise? |
| The government's annual take from stamp duty is around £12bn, according to the latest figures released by HM Revenue and Customs (HMRC). | The government's annual take from stamp duty is around £12bn, according to the latest figures released by HM Revenue and Customs (HMRC). |
| That's roughly equivalent to 2% of the Treasury's total tax take. | That's roughly equivalent to 2% of the Treasury's total tax take. |
| The nine-month stamp duty holiday will cost the Treasury an estimated £3.8bn. | The nine-month stamp duty holiday will cost the Treasury an estimated £3.8bn. |