On Wednesday 8th July, the government announced that they were scrapping Stamp Duty for all homes under £500,000 until March 2021.
However what wasn’t initially clear was how this could or would affect landlords and investors. Following the initial announcement, everyone took their time to look into things in a bit more detail so I thought I’d give you a bit of clarity as to what this means.
To be clear: This does not include additional homes or buy to let properties.
So if, between now and the 31st March 2021, and it’s your principal home, your only owned property then you will pay no stamp duty up to the value of £500,000. This is going to really stimulate the property market .
This means that there is still the additional charge for stamp due on top of the existing base rates.
However, what this holiday means, is that instead of paying the base rate PLUS the stamp duty. You only need to pay the stamp duty.
Are you with me?
To break it down: At the moment there is no base rate on properties up to £125,000. However before the announcement, to buy one as a second property, you would be required to pay 3% stamp duty. For properties between £125k and £250k, you pay 2% base PLUS the 3%.
So now, with no base rate, you only have to pay the 3% on properties up to £250k.
So what does this mean for property investors? You’re going to save a bit of money, obviously, but this also means there’s going to be a bigger market to sell to and it means that people may be able to a little more for your property.
And remember this is effective immediately – so if, like me, you have a property going through now, then you will be saving straight away!