Stamp Duty Explained by L&Q
What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is a payment made by homebuyers when purchasing a property. How much you pay depends on a number of factors, including whether or not you are a first-time buyer, and what the value of the house you are purchasing is.
What is the latest Stamp Duty policy?
The Government recently confirmed a series of measures to support hopeful homeowners towards purchasing a property. In a bid to help first time buyers onto the property ladder, the current stamp duty free threshold payment of £300,000 for first time buyers has been raised to £425,000. This means that first time buyers do not have to pay any tax on the first £425,000 of the value of their property, and those buying a property priced at less than £425,000 will pay no stamp duty at all.
Further to this, the Government has increased the value on the property of which first time buyers can claim relief on, up from £500,000 to now £625,000.
For those who aren’t first time buyers, the standard stamp duty free threshold has increased from £125,000 to £250,000, in a permanent cut to the SDLT threshold.
What are the new thresholds?
Following the latest announcement, first time buyers will now have to pay:
- no SDLT up to £425,000
- 5% SDLT on the portion from £425,001 to £625,000
For those moving home, the below stamp duty rates will apply:
- £0 – £250,000 (£425,000 for first time buyers) = 0%
- £250,000 – £925,000 = 5%
- £925,000 – £1,500,000 = 10%
- £1,500,000+ = 12%
How much could I save?
The savings from the stamp duty holiday extension could be significant, as you pay nothing on the first £425,000, and varying percentages for any portion above this threshold. For instance, for properties between £425,001 to £625,000, a 5% tax applies to the portion above the £425,000 threshold. Taking an example, if you purchase your property at a price of £475,000, you would pay a 5% stamp duty just on £50,000, equating to £2,500.
Will I have to pay Stamp Duty on my new home at The Quarry?
L&Q and Anderson have launched their latest collection of one and two bedroom homes at The Quarry, and following the latest changes to stamp duty, first time buyers now won’t pay any stamp duty on homes currently selling at the Erith based site.
For more information on available homes at The Quarry, please click here.
