08-07-2020

Chancellor of the Exchequer Richi Sunak has today announced a major temporary overhaul of stamp duty in England and Northern Ireland.

Changes take effect from 8th July 2020 and will cease 31st March 2021

The New Stamp Duty Rates And Bands

The nil rate band for stamp duty will be increased from £125,000 to £500,000. This is across the board for residential purchases. Therefore first time buyers and home movers purchasing for £500,000 or below will benefit from a nil rate of stamp duty.

For those purchasing at £500,001 and above, the nil rate still applies and the stamp duty tiers then are applied as normal. This effectively knocks at least £15,000 off the stamp duty bill for every transaction above £500,001.

For those purchasing a second property where the additional 3% stamp duty takes effect. The £500,000 nil rate band will still apply as it did with the £125,000 nil rate. Therefore a flat rate of 3% will be applicable to transactions up to £500,000. For transactions above £500,001 the nil rate still applies and the stamp duty tiers then are applied as normal With the additional 3% added.

This is a huge boost to those looking for a higher loan to value mortgage as money which had been set aside to pay stamp duty can now be used towards the deposit.

Purchasing a second home or buy to let could also now be more accessible.  For example the stamp duty bill on a £500,000 second home would yesterday have been £30,000. This is now £15,000.

The saving on the first £500,000 is then passed on at higher purchase prices as it is for a standard residential purchase. Rates increase at the same level. This is great for anyone looking to purchase a second residential property or a higher value investment property. 

First Property Buyers Stamp Duty Land Tax Property Value Bands and Rates

Property or lease premium or transfer value SDLT rate
Up to £500,000 Zero
The next £425,000 (the portion from £500,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%


Second Property Buyers Stamp Duty Land Tax Property Value Bands and Rates

Property or lease premium or transfer value SDLT rate
Up to £500,000 3%
The next £425,000 (the portion from £500,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%

Stamp Duty Land Tax Guide For First Property Buyers

Property or lease premium or transfer value SDLT Amount
Up to £500,000 £0
£600,000 £5,000
£700,000 £10,000
£800,000 £15,000
£900,000 £20,000
£1,000,000 £28,750
£1,100,000 £38,750
£1,200,000 £48,750
£1,300,000 £58,750
£1,400,000 £68,750
£1,500,000 £78,750
£1,600,000 £90,750
£1,700,000 £102,750
£1,800,000 £114,750
£1,900,000 £126,750
£2,000,000 £138,750

As always, if you would like to chat over your options please get in contact by email enquiry@foxdavidson.co.uk or give us a call.