Chancellor Rishi Sunak has announced temporary changes to Stamp Duty thresholds as part of a wider series of measures.

Intended to stimulate UK economic recovery following the coronavirus pandemic, the Coronavirus Recovery Plan targets several areas, including property.

With lockdown restricting movement and social contact, the housing market came to an abrupt halt. The chancellor has temporarily changed when stamp duty is paid to help restart the sector. The new thresholds give an incentive to house buyers to act within the next eight months or so.

What are the temporary stamp duty thresholds?

Stamp Duty Land Tax (SDLT) is a tax paid by buyers purchasing property or land over a certain value. The amount of stamp duty that you pay normally depends on a combination of:

• whether you are a first-time buyer
• the value of the property/land

The temporary revision to stamp duty means that the thresholds have changed.

Stamp duty rates and thresholds for buyers purchasing residential properties under the Coronavirus Recovery Plan

The amount of stamp duty that you pay isn’t applied as a flat rate based on the amount that you pay for the property. Instead, you’ll only pay stamp duty at the rate within each range.

This means that if you buy a house for £600,000 then under the temporary limits you will pay:

• no stamp duty on the first £500,000
• stamp duty at 5% on the next £100,000

The rates are a bit different for people who are buying additional properties, essentially an extra 3% on the primary rates. We’ve included the rates in a table below.

Higher stamp duty rates and thresholds for buyers purchasing additional properties under the Coronavirus Recovery Plan

When is the coronavirus stamp duty change available?

The temporary changes launched immediately, and will apply to the sale of eligible property and land:

• From 8th July 2020
• Until 31st March 2021

Does the temporary stamp duty cut apply to Buy-To-Let properties?

Yes, it’s good news for the BTL sector. Buyers purchasing properties in order to let them will also be covered by the temporary changes.

Apart from these changes, the manner in which stamp duty is paid stays the same. Read our article for more information about how and when to pay stamp duty. 

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Elizabeth Hughes

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