Although the primary focus has been on first-time buyers, landlords and property investors can benefit from the Stamp Duty Holiday and the extension announced in the Spring Budget.
Before 8 July 2020, buy-to-let Stamp Duty rates were as follows:
Three per cent up to £125,000
Five per cent between £125,001 and £250,000
Eight per cent between £250,001 and £925,000
13 per cent between £925,001 and £1.5 million
15 per cent above £1.5 million
So, if you purchased a £500,000 buy-to-let property before the Stamp Duty changes took place, you would have paid £30,000 (three per cent of £125,000, five per cent of the next £125,000 and eight per cent of the remaining £250,000).
Until 1 July 2021, landlords and property investors are only required to pay a three per cent flat-out fee up to the raised threshold of £500,000. So, instead of paying £30,000 in Stamp Duty on a £500,000 property – you would only pay £15,000.
After that date and until 30 September 2021, this threshold will be lowered to £250,000. Landlords can still benefit from this ‘interim’ period. For example, if you purchase a buy-to-let at £250,000 between these dates you would pay a three per cent stamp duty fee of £7,500.
However, if you purchased this same property on 1 October 2021 (when stamp duty rates go back to normal) your stamp duty charges would be £10,000 (three per cent of the first £125,000 then five per cent of the remaining £125,000).
Buy-to-let property purchases above £500,000 will also be subject to additional Stamp Duty rates. Here is a quick break down of the brackets:
Three per cent up to £500,000
Eight per cent between £500,001 and £925,000
13 per cent between £925,001 and £1.5 million
15 per cent above £1.5 million
For any advice please contact us.
