Stamp Duty cut on properties up to £500,000

The Chancellor recently announced that the Stamp Duty threshold will be raised temporarily from £125.000 to £500,000.

In an attempt to boost the UK property market due to the negative impact caused by the COVID-19 crisis, Rishi Sunak announced a temporary cut to Stamp Duty for residential property costing up to £500,000. The cut in Stamp Duty was immediately applied from 8th July 2020 and will remain in place until 31st March 2021.

What the Chancellor told MPs:-

“One of the most important sectors for job creation is housing. The construction sector adds £39 billion a year to the UK economy. House building alone supports nearly three quarter of a million jobs, with millions more relying on the availability of housing to find work. Uncertainty abounds in the market – a market we need to be thriving. We need people feeling confident – confident to buy, sell, renovate, move and improve. That will drive growth. That will create jobs. So to catalyse the housing market and boost confidence, I have decided today to cut Stamp Duty. Nearly nine out of ten people buying a main home this year [in England and Northern Ireland], will pay no Stamp Duty at all.”

How this cut in Stamp Duty works:-

First time buyers and purchasers who do not own additional properties, will not pay any Stamp Duty on residential properties valued at up to £500,000.
For purchasers who own additional properties and are not replacing their main home, the 3% threshold has been extended to £500,000.
Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% Stamp Duty.
The nil rate band which applies to the ‘net present value’ of any rents payable for residential property leases is also increased to £500,000 from 8th July 2020 until 31st March 2021.
On 1st April 2021, the reduced rates will cease and revert to the rates of the Stamp Duty that were in place before 8th July 2020.

How this affects purchasing a property costing £500,000:-

For standard rate transactions, the Stamp Duty will be reduced from £15,000 to Nil.
The Stamp Duty for First-Time Buyers will be reduced from £10,000 to Nil.
For purchasers whereby the 3% surcharge applies, the Stamp Duty will be reduced from £30,000 to £15,000

On average, The change will cut approximately £4,500 from the average Stamp Duty bill in England and Northern Ireland, the Chancellor claimed and will apply to all transactions completed before 31st March 2021.

According to the property portal Zoopla "The stamp duty holiday is welcome news for buyers, estate agents and developers after the housing market was effectively brought to a halt by the coronavirus crisis".