Posted on Jul 13, 2020

The Mortgage Bureau

Under the changes, homebuyers will not pay stamp duty on property purchase prices up to £500,000 until 31 March 2021. But, while stamp duty does not apply on any home purchase up to £500,000, the 3% surcharge remains in place.

The government’s well-trailed tax cut was welcomed by the mortgage and property industry after it was announced it would be implemented with immediate effect.

Over the last 5-10 years the government have been reforming stamp duty to the remove tax burden from first-time buyers and increase the tax take from landlords, having today waived stamp duty the playing field has been levelled for first time buyers and buy to let investors as both are paying the same nil rate.

However, these landlords will still need to pay the 3% second home surcharge.

Analysis of the temporary tax rules by investment broker AJ Bell showed that for a purchase of a home worth £300,000, that is not a main residence which includes second homes and investment purchases, the stamp duty bill would be £9,000 instead of £14,000. This is because the 3% surcharge on second homes is still applicable. But normal stamp duty rates do not apply.

For a purchase of a £500,000 property, the £30,000 tax bill would be cut in half.

For help in buying your next property in Cambridge, call The Mortgage Bureau on 01223 656412.

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