Buying or selling a home is always stressful but the process has been made a little easier for buyers as the starting point at which stamp duty becomes payable has been temporarily raised.
Purchasers in England and Northern Ireland pay stamp duty land tax (SDLT) which currently only applies to purchases over £500,000. This could save you £15,000 on a residential property costing £500,000.
The tax reduction also applies when buying a second home, on which an additional 3% SDLT is paid on the entire purchase consideration.
The purchase must complete on or before 31 March 2021 to qualify for this tax reduction, after which the threshold is expected to revert to £125,000.
Buyers in Scotland pay land and buildings transaction tax (LBTT) and the Scottish Government has raised the LBTT threshold from £145,000 to £250,000 until 31 March 2021. You could save £2,100 on a property costing over £250,000 in Scotland and this saving also applies when buying a second home in Scotland or purchasing through a company.
The Welsh Government applies land transaction tax (LTT) to purchases of land and buildings and the threshold for LTT has also been increased to £250,000 until 31 March 2021.
However, if you are planning to buy a second home in Wales the tax saving will not apply; you will have to pay the normal rates plus a 3% supplement on the entire purchase price.
