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Stamp duty calculator: How much will the cut save you?

How much would the stamp duty cut save you if you move home? Work out your bill with our calculator

 The Chancellor has taken the axe to one of Britain’s most hated taxes as he slashed stamp duty to zero for almost 90 per cent of homebuyers.

Rishi Sunak raised the threshold at which stamp duty kicks in to £500,000 today, to help people move home, save them up to £15,000 in tax, and boost the economy in the coronavirus recovery.

In a stamp duty holiday that will last until 31 March 2021, buyers will now pay no tax whatsoever up to £500,000, with the Treasury confirming to This is Money that more expensive purchases will only see normal rates applied above that level.

Buy-to-let investors and those buying second homes will still face a surcharge at all levels including the standard zero per cent band, meaning their bills will start at 3 per cent up to £500,000.

This chart shows how stamp duty will be slashed during the tax holiday that will last until 31 March 2021, with a  zero rate to £500,000. The red bars show bills under the old rates and the green bars show bills now under the stamp duty holiday

Purchase price Old rates New rates
£100,000 £0 £0
£200,000 £1,500 £0
£300,000 £5,000 £0
£400,000 £10,000 £0
£500,000 £15,000 £0
£600,000 £20,000 £5,000
£700,000 £25,000 £10,000
£800,000 £30,000 £15,000
£900,000 £35,000 £20,000
£1,000,000 £43,750 £28,750
£1,100,000 £53,750 £38,750
£1,200,000 £63,750 £48,750
£1,300,000 £73,750 £58,750
£1,400,000 £83,750 £68,750
£1,500,000 £93,750 £78,750
New stamp duty rates apply to house purchases between 8 July 2020 and 31 March 2021 

The greatest benefit is to those who would have faced the biggest tax bills on homes at £500,000 or above – they will save the full £15,000

But these buyers faced the most punitive charges previously and the Chancellor believes removing friction in the property market will encourage more people to move and spend money as they do.

How do the new and old rates of stamp duty compare and how much could you save if buying a home? We crunch the numbers below.

Stamp duty on your own home

Property purchase price Stamp duty rate
£0 to £500,000 0%
£501,000 to £925,000 5%
£925,001 to £1.5million 10%
£1.5million+ 12%
For purchases between 8 July 2020 and 31 March 2021 

Those buying their own home will see a zero per cent rate of stamp duty all the way up to £500,000, compared to the previous £125,000 threshold.

Above this level they will tax at a graduated rate on the amount above thresholds starting at 5 per cent, rising to 10 per cent between £925,001 and £1.5million, and 12 per cent above £1,500,000.

Previously stamp duty kicked in at 2 per cent above £125,000, before rising to 5 per cent above £250,000.

The stamp duty holiday mimics the relief for first-time buyers, who previously paid no stamp duty up to £300,000.

Stamp duty on buy-to-let and second homes

Property purchase price Stamp duty rate
£0 to £500,000 3%
£501,000 to £925,000 8%
£925,001 to £1.5million 13%
£1.5million+ 15%
For purchases between 8 July 2020 and 31 March 2021 

The stamp duty holiday applies in part to buy-to-let and second home purchases, but these buyers must still pay the 3 per cent surcharge at all levels including below £500,000.

This means that the zero rate becomes 3 per cent and that is added to rates above the standard owner occupier thresholds. 

While this does not slash stamp duty bills by as much for buy-to-let and second homes, it does make purchases temporarily cheaper. 

Stamp duty rates before the holiday

Band Own home stamp duty rates Buy-to-let 
and second homes
£0 – £125k 0% 3%
£125,001 – £250k 2% 5%
£250,001 – £925k 5% 8%
£925,001 – £1.5m 10% 13%
£1.5m + 12% 15%
* No stamp duty is paid on property transactions costing less than £40,000 as these are considered low value and not reported to HMRC 

Under the plans announced by the Chancellor today, stamp duty will revert to the standard rates for any house purchase after 1 April 2021.

There is a concern that while the stamp duty holiday may boost the property market in the short term, it could also lead to a spike in sales that pushes up prices before the deadline, followed by a slump next spring after purchases are pulled forward to avoid a 1 April tax hike.

This has been observed in previous stamp duty holidays and happened before the introduction of the 3 per cent buy-to-let and second homes surcharge.

There will undoubtedly be pressure on Mr Sunak to extend the stamp duty holiday as the deadline approaches. 

Critics of stamp duty, who argue that it inhibits activity, stalls the top end of the property market, discourages downsizing and stops people moving for work, will hope that the temporary cut becomes permanent. 

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