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| How would a stamp duty holiday work? | How would a stamp duty holiday work? |
| (about 7 hours later) | |
| The chancellor is expected to announce changes to stamp duty on Wednesday to help cut costs for anyone buying a home. | |
| Reports suggest that the level at which the tax is charged could be temporarily raised to £500,000 to boost the property market and help buyers struggling because of the coronavirus crisis. | Reports suggest that the level at which the tax is charged could be temporarily raised to £500,000 to boost the property market and help buyers struggling because of the coronavirus crisis. |
| 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. |
| In Scotland and Wales, the rates are slightly different. | In Scotland and Wales, the rates are slightly different. |
| What could change? | What could change? |
| There is speculation that the government could increase the lower stamp duty threshold to either £300,000 for all buyers, or as high as £500,000. | There is speculation that the government could increase the lower stamp duty threshold to either £300,000 for all buyers, or as high as £500,000. |
| That means any property purchases below the new level would not need to pay stamp duty. | That means any property purchases below the new level would not need to pay stamp duty. |
| The move would help buyers who have taken a financial hit because of the coronavirus crisis. | The move would help buyers who have taken a financial hit because of the coronavirus crisis. |
| It is also aimed 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 aimed to boost a property market hit by lockdown. According to the Halifax, house prices have fallen for four months in a row. |
| When will the stamp duty holiday happen? | When will the stamp duty holiday happen? |
| It is likely to be announced on Wednesday in the chancellor's summer statement. | It is likely to be announced on Wednesday in the chancellor's summer statement. |
| The increase will probably be temporary, though, perhaps lasting six months, which the government feels is long enough to help revive the flagging property market. | The increase will probably be temporary, though, perhaps lasting six months, which the government feels is long enough to help revive the flagging property market. |
| However, rumours that it may not begin until October, at the time of the autumn Budget, prompted critics to warn it could encourage people to delay their plans for buying a home, extending the current property market blues for another three months. | However, rumours that it may not begin until October, at the time of the autumn Budget, prompted critics to warn it could encourage people to delay their plans for buying a home, extending the current property market blues for another three months. |
| It could also 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. | It could also 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. |
| How much could a buyer save? | How much could a buyer save? |
| The more you pay - up to the possible new £500,000 threshold - the more you could save on stamp duty. | The more you pay - up to the possible new £500,000 threshold - the more you could save on stamp duty. |
| If you currently buy a house for £275,000, for instance, the Stamp Duty you'd have to pay would be £3,750. | If you currently buy a house for £275,000, for instance, the Stamp Duty you'd have to pay would be £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). |
| Meanwhile 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. | Meanwhile 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. |
| 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. |