The Chancellor of the Exchequer Rishi Sunak will reportedly reveal plans this week to increase the threshold at which point buyers start to pay Stamp Duty. Currently, this threshold is £125,000, however it could be lifted to as much as £500,000, The Times reports.
The temporary measure – which is expected to be implemented in the autumn Budget – is intended to stimulate the housing market and help rebuild the UK economy.
Mr Sunak will deliver a summer statement on Wednesday, July 8.
The Times reports the Chancellor will announce stamp duty plans on Wednesday, as well as a temporary VAT cut for pubs, restaurants and cafes.
The plans for a “stamp duty holiday” are intended to help first-time buyers to get on the housing ladder.
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Prime Minister Boris Johnson has said a number of times in the past that he wants to overhaul stamp duty, calling it a “huge problem”.
Currently, stamp duty is not payable on the first £125,000, with the rate being two percent up to £250,000.
Homebuyers will pay five percent on the value of the property up to £925,000.
From £925,001 to £1.5 million, the SDLT rate is 10 percent.
Then, the remaining amount – meaning any portion above £1.5million, has a SDLT rate of 12 percent.
There are higher rates for additional properties.
These buyers usually need to pay three percent on top of the normal SDLT rates if they’re buying a residential property which means a person will need to own more than one.
However, The Times reports that Mr Sunak is considering increasing the threshold to £500,000 for a temporary period.
Then, on any portion from £300,001 to £500,000, the rate is five percent.
However, if the price of the property is over £500,000, then the buyers follow the rules for people who have bought a home before.
A person is eligible if:
- They, and anyone else they’re buying with, are first-time buyers
- They complete their purchase on or after November 22, 2017.