This week the Chancellor Rishi Sunak announced a Stamp Duty holiday, increasing the Stamp Duty threshold from £125,000 to £500,000 for a limited time. The temporary Stamp Duty Land Tax (SDLT) changes are welcome news for the housing market, assisting purchasers to either get on or move further up the property ladder and those planning to purchase an investment property in the near future.
RESIDENTIAL RATES
For a temporary period, property purchasers in Northern Ireland up to the value of £500,000 will now not have to pay Stamp Duty. The Stamp Duty holiday is applicable for all purchases of residential property that complete in Northern Ireland between 8 July 2020 to 31 March 2021.
The reduced rates are outlined below.
Property value SDLT rate
Up to £500,000 Zero
The next £425,000 (from £500,001 to £925,000) 5%
The next £575,000 (from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%
Prior to 8 July, those purchasing their first home for £300,000 or less were entitled to first time buyers’ relief and therefore not required to pay SDLT.
First time buyers will now benefit as a result of the reduced rates set out above as they can purchase a property up to the value of £500,000 without incurring Stamp Duty. For example, if a first time buyer were to purchase a property for £500,000 they will obtain a saving of £10,000.
ADDITIONAL PROPERTIES
The revised rates are beneficial for those who are planning to purchase a second home or investment property given the savings on the basic level of Stamp Duty.
However, for purchasers of an additional property the 3% higher rate will apply on top of the revised standard rates.
The revised rates in respect of additional properties are set out below.
Property value SDLT rate
Up to £500,000 3%
The next £425,000 (from £500,001 to £925,000) 8%
The next £575,000 (from £925,001 to £1.5 million) 13%
The remaining amount ( above £1.5 million) 15%
For further information and advice in relation to the above, please contact our Property Team.