Whether you are buying or selling a home, the process is always somewhat stressful, even more so in the current climate. However, you will be pleased to know that the starting point in which stamp duty becomes payable has been temporarily raised.
How Has Buying A Home Changed?
Whenever a home is purchased, buyers in England and Northern Ireland are required to pay stamp duty land tax (SDLT). The newly introduced reduction now means that this only currently applies to purchases over £500,000, which could save you as much as £15,000 on a residential property costing £500,000. This is also applicable to those investing in a second home, who will pay an additional 3% SDLT on the entire purchase. To qualify for this tax reduction, you must finalise your purchase on or before 31st March 2021. Any homes bought after this date are expected to revert back to the £125,000 threshold.
For those situated in Scotland, there has also been a rise in the pay land and buildings transaction tax (LBTT) threshold. Also until 31st March 2021, the LBTT threshold will be increased from £145,000 to £250,000 on both first and second homes. This would result in a saving of £2,100 on a property costing over £250,000.
Much like England, Scotland and Northern Ireland, the Welsh Government have increased their land transaction tax (LTT) to £250,000, again, until 31st March 2021. However, unlike others, this tax saving does not apply to those purchasing a second home in Wales. The normal rates plus a 3% supplement on the total purchase price will apply.