Changes to Stamp Duty – What Does This Mean For Home Buyers?

Whether you’re buying your first property, moving up the property ladder or even purchasing multiple properties, there are many costs you mightn’t have considered. From legal fees and insurance to VAT and stamp duty, extra fees can be a minefield. However, the government has recently announced some changes to stamp duty following the COVID-19 pandemic and subsequent closure of the housing market. We’ve laid out what these changes might mean for first-time buyers, those moving up the property ladder into more expensive properties or areas, and those who are considering buying multiple properties, such as a second home.

What is Stamp Duty?

Stamp Duty is a tax that you might have to pay if you buy residential property (or a piece of land) in England or Northern Ireland. Initially, Stamp Duty was paid on properties of £300,000 or more. However, following the changes, Stamp Duty fees only apply to properties of £500,000 and over, up until the 31st of March 2021.

First Time Buyers & Stamp Duty

The average price for a first home in England is around £220,000 – so most first-time buyers were exempt from paying Stamp Duty anyway. However, if you’re planning on buying a more expensive property, or buying in a more expensive area (the average price a first-time buyer will pay for a property in London is £420,000, for example), you’ll be able to take advantage of the changes to Stamp Duty if you buy a property that costs less than £500,000 before March 31st 2021. If you’re buying a new property, we can give you a quick quote for your homebuyers survey.

Moving Up The Property Ladder

A growing family, lifestyle change, or new job are some of the reasons that you might buy a new property, whether you’re downsizing or moving up the property ladder into a larger home or new area. If you’re already a homeowner and planning on buying a new property, the Stamp Duty changes apply to you. If you’re selling your property and buying a new house, you won’t have to pay Stamp Duty if the property is less than £500,000.

Buying Additional Property

If you’re buying an additional property to rent out, or a second home, you’ll pay Stamp Duty on freehold and leasehold properties costing more than £40,000. On properties costing up to £500,000, you’ll pay 3% Stamp Duty.

If you want more information about Stamp Duty for a property you’re planning on buying, you can get in touch with our team.

(The information above is intended as a guide only, it should not be taken as formal advice.)