Private Client

Stamp Duty Rates – An Investors Perspective

1 September 2020

By Conal McGarrity

Stamp Duty Rates – An Investors Perspective

The Chancellor of the Exchequer recently announced that the purchase of any residential property between the 8th July 2020 and the 31st March 2021 would only incur a payment of Stamp Duty for any properties above £500,000.00.

However, these rates do not wholly apply to those people who are purchasing additional dwellings i.e. they already own one dwelling and are purchasing another for example a buy to let property or a second home. In those circumstances higher rates of Stamp Duty brought in by the Government a couple of years ago still remain (albeit at an amended rate) and those new rates are as follows:

Up to £500,000	3%
The next £425,000 (the portion from £500,001 to £925,000)	8%
The next £575,000 (the portion from £925,001 to £1.5 million)	13%
The remaining amount (the portion above £1.5 million)	15%

There is a saving as the previous rates were:

£40,000 up to £125,000	3%
over £125,000 to £250,000	5%
over £250,000 to £925,000	8%
over £925,000 to £1.5 million	13%
over £1.5 million	15%

Companies buying who have a property portfolio held under a limited company or clients buying additional residential properties in their sole name will not be exempt up to £500,000 as some appear to think. However, there are savings for those now purchasing over £125,000. Therefore, whilst the reduction is a welcome one there still is a substantial tax for those buy to let investors to think about.