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The Stamp Duty Holiday – What Investors Need to Know
The Stamp Duty Holiday – What Investors Need to Know
15:08 23 July 2021
In an attempt to boost the housing market in the UK, and the economy as a whole, the government decided to introduce a stamp duty holiday. Due to the Covid-19 pandemic, the UK, as well as countries around the world, underwent multiple lockdowns. This impacted every sector and every industry, including the housing market and property market in the UK. So to boost the buyer’s confidence, revive the housing market and help the economy, the UK government announced a stamp duty holiday. Here is everything that investors need to know about the stamp duty holiday.
What is the stamp duty holiday?
The stamp duty holiday is a temporary suspension of stamp duty on properties that are under £500,000. Unlike any other government scheme in the past, the stamp duty holiday is applicable on all properties under £500,000, be it for first-time buyers or seasoned investors. As for properties that are above £500,000, the stamp duty has been reduced drastically. If you’ve been finding out about property valuation Manchester, be rest assured that you can save thousands of pounds on your upcoming property purchase thanks to the stamp duty holiday!
When was the stamp duty holiday introduced, and when does it end?
The UK government introduced the stamp duty holiday from July 2020 until March 2021. However, the stamp duty holiday was such a success that the government further decided to extend it till September 2021. Whether or not the government will further extend the stamp duty holiday after September 2021 is still uncertain.
If you are looking to invest in property before the stamp duty holiday deadline, get in touch with estate agents in Manchester.
What is the breakdown of stamp duty taxation?
Up until July 2021, buyers had to pay no stamp duty on property purchases under £500,000. From 31st July 2021, buyers will not be required to pay any stamp duty when buying a residential property under £250,000. On the purchase of a property between £250,001 and £925k, buyers will have to pay 5 per cent as stamp duty whereas, on the purchase of property worth 925,001 to £1.5m, buyers will have to pay 10 per cent stamp duty. The stamp duty for properties above £1.5m is consistent at 12 per cent. Also, it is important to note that investors and non-first-time buyers have to pay an additional 3 per cent on their property purchase.
How much does a seasoned investor have to pay as stamp duty?
The threshold for seasoned investors, property buyers and non-first time buyers are the same for first-time buyers. The only difference is that individuals who already have a house in their name will have to pay the stamp duty plus an additional 3 per cent when they purchase a property.
How much does a first-time investor have to pay as stamp duty?
If you do not own a home of your own, if you live on rent or live with your family, and you are looking to invest in property, then you can take advantage of the stamp duty holiday. As long as you do not own a home and you are a first-time investor, you can enjoy the benefits of the stamp duty holiday without paying an additional 3 per cent.
How much can an investor save with the stamp duty holiday?
Let’s say an investor buys a property worth £750,000. No stamp duty is applied on the first £250,000. On the remaining £500,000, the investor will have to pay a stamp duty charge of 5 per cent. That means the stamp duty paid on the property purchase will amount to £25,000 plus 3 per cent of the total valuation. If a first-time buyer or first-time investor were making the purchase, they would not have to pay the additional 3 per cent. Essentially, an investor who is buying a property worth £500,000 or more could save up to £15,000 due to the stamp duty holiday.