Call to invest

01702 820021

Arrange a Consultation

Stamp Duty Holiday makes property investment a no-brainer

by Nikki Dale -

  • What is UK Stamp Duty?
  • How does the Stamp Duty cut effect house buyers?
  • Who does it help?
  • Particularly, how does it affect investors?
  • What will you be saving on your purchase between now and 31st March 2021
Summer Statement: the latest government financial initiatives

It’s amazing to think Rishi Sunak has only served as Chancellor of the Exchequer since February 2020.  With a prominent and somewhat unprecedented amount of time in the spotlight, delivering a series of additional statements since he presented his Spring Budget on 11 March.

We all understand these announcements have been responses to the financial impact of the COVID-19 pandemic, and the recent summer statement is exactly that, with the challenge now being a transition from emergency employment support to a new “Plan for Jobs”.

What’s the financial backdrop to the summer statement?

The government finances are in deep deficit. In only the first two months of the current financial year, the Treasury borrowed £103.7 billion, which was over six times as much as in the same period in 2019/20 and close to double the Budget forecast for the entire year.

In May, for the first time since 1963, total government debt exceeded 100% of GDP the UK’s economic output for the whole year.

Summer Statement Highlights
  • A £1,000 Job Retention Bonus will be introduced when the Coronavirus Job Retention Scheme ends for employees who have been furloughed.
  • A new Kickstart Scheme will cover employers’ costs for new six-month work placements for trainees aged 16-24.
  • A £1,000 payment will be made to employers for each 16-24-year-old on work placement and training.
  • Employers who hire new apprentices will receive payments of up to £2,000.
  • There will be a temporary cut to Stamp Duty Land Tax on residential property, increasing the zero-rate band to £500,000 and saving purchasers up to £15,000.
  • The rate of VAT will be cut temporarily from 20% to 5% for restaurant, food, accommodation and attractions businesses.
  • An ‘Eat Out to Help Out’ Scheme will offer 50% meal discounts during August.

READ ARTICLE: What is UK Stamp Duty Land Tax (SDLT)?

The three elements of the “Plan for Jobs” initiative


This element focuses on supporting businesses with several job retention initiatives, especially with the end the CJRS – still planned for October.


This element focuses on the hospitality and leisure sector, which saw over 80% of firms temporarily cease trading in April and has 1.4 million furloughed workers.


The creation measures are primarily targeted on the housing and construction sector – there will be no SDLT on the first £500,000 portion of property value. However, the 3% additional rate will still apply to additional properties, but to the new threshold of £500,000.

What were SDLT rates before the temporary holiday announcement

Before the recent announcement there were two buyer-bands a primary residential purchase would fall into:  the Mover or the First-time Buyer.  And if you were buying a second property, holiday home, buy to let, you would pay the “Mover” additional property rates, with a surcharge.

A Mover

Stamp Duty was payable by movers when the property was £125,001 or over.

Property Purchase Price Single Property Rates
£0 to £125,000 0%
£125,0001 to £250,000 2%
£250,001 to £925,000 5%
£925,001 to £1,500,000 10%
£1,500,001 + 12%


A First-Time Buyer

Stamp Duty was payable by first-time buyers when the property was £300,001 or over. If the property was £500,001 or over it was the same tax payment as a “Mover”.

Property Purchase Price Single Property Rates
£0 to £300,000 0%
£300,0001 to £500,000 5%
£500,001 to £925,000 5%
£925,001 to £1,500,000 10%
£1,500,001 + 12%


What was Stamp Duty, for investors, before the cut?

New government legislation came in in 2016, whereby second home buyers and landlords buying property for buy to let purposes, would have to pay a higher Stamp Duty Land Tax.  Not good for landlords at the time, but it was one of the deterrent-measures the government introduced to help combat the UK’s housing crisis.

Property Purchase Price Additional Property Rates
£0 to £125,000 3%
£125,0001 to £250,000 5%
£250,001 to £925,000 8%
£925,001 to £1,500,000 13%
£1,500,001 + 15%


The full story on the new Stamp Duty cut and who it helps?

The good news about the recently announced temporary SDLT holiday, is it applies to anyone buying a property over the old threshold.

Between 8 July 2020 to 31 March 2021, there will be no SDLT on the property up to the value of £500,000, whether you are a mover or a first-time buyer:

New Single Property Rates 
Property Purchase Price Single Property Rates
£0 to £500,000 0%
£500,0001 to £925,000 5%
£925,001 to £1,500,000 10%
£1,500,001 + 12%


This is fantastic news for the housing market, sellers, movers and first-time buyers, plus second-home buyers and property investors who will also make a saving on SDLT too.

The property market froze during lockdown and data from Nationwide showed house prices falling in June 2020 for the first time in almost eight years.  However, it’s hoped, this quickly introduced SDLT holiday, will get the market moving again in the right direction.

The housing market being buoyant, also effects other parts of the economy, employment especially, but also DIY shops and furniture shops.

So, how does the stamp duty cut apply to buy-to-let property investors?

If you’re buying an investment property or second home, you’ll still need to pay the 3% stamp duty surcharge, but this will be on the new temporary rates – so you could still make big savings.

The temporary new rates for buy-to-let and second home purchases are:

Property Purchase Price Additional Property Rates
£0 to £500,000 3%
£500,0001 to £925,000 8%
£925,001 to £1,500,000 13%
£1,500,001 + 15%


Before today, if you bought an investment property for £250,000, you’d have paid 3% on the first £125,000 and 5% on the second £125,000, resulting in a stamp duty bill of £10,000. From today, you’ll only pay 3% stamp duty on the whole purchase price, meaning a bill of £7,500 and a saving of £2,500.

Here is a guide to see the SDLT savings on your investment property:


Property Price SDLT before After 8.7.2020 Saving
£100,000 £3,000 £3,000 £0
£200,000 £7,500 £6,000 £1,500
£400,000 £22,000 £12,000 £10,000
£500,000 £30,000 15,000 £15,000
£700,000 £46,000 £31,000 £15,000
£1m £73,750 £58,750 £15,000
£2m £213,750 £198,750 £15,000


Will this have the effect that is needed for a quick recovery?

There are many people that will change their moving or investment property plans due to their current financial challenges, redundancy for example, and the full hit of the unemployment rate will not be truly clear until October 2020 when the furlough job retention scheme is withdrawn completely.

That said, there are signs of positivity in the broader housing market, with Rightmove reporting that numerous records have been broken in terms of people looking on its website and actively contacting agents.

Also, Rightmove reported, supply has not increased at the same rate as demand, so this has pushed prices up by 1.9% compared with prices just before lockdown.

For the investment property sector, which has many sub-sectors and micro-sectors to invest into, there has not been the downturn or drop in interest or price fall.  Fortunately, off-plan purpose-built Residential and Student, and commercial property is still very fluid and has been moving throughout the lockdown, with developers and contractors maybe pausing construction briefly, but nothing significant to cause any major delays.


SOURCE: Alliots

Share online:

Leave a Reply

Latest News & Blogs


Call us on free phone 01702 820021

Newsletter Sign Up

For the latest industry news, join the REW E-Newsletter mailing list and be the first to know about our investment opportunities.

Note: It is our responsibility to protect your privacy and we guarantee that your data will be completely confidential.