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8 July 2020, 10:04 | Updated: 8 July 2020, 13:30
What is stamp duty and when will it be reduced? Here's what we know...
Reports suggest people in England and Northern Ireland could be getting a stamp duty 'holiday' in a bid to boost the housing market.
Due to be discussed in Chancellor Rishi Sunak’s financial speech on Wednesday, the temporary measure would remove tax on the purchase of homes of up to £500,000.
But what does this mean for homebuyers and when would it come into place? Find out everything…
Stamp duty land tax (SDLT) is a tax paid by those buying a property or piece of land over a certain price.
Currently, all house-buyers in England and Northern Ireland must pay stamp duty on properties over £125,000.
Alternatively, if you are a first-time home buyer you won't need to pay stamp duty unless the property you are buying is more than £300,000.
The stamp duty paid is dependent on the price and type of property, usually you would expect to pay more if the property is more expensive.
Typically, this means no stamp duty is paid on the first £125,000 of homes, while 2% is paid of the value between £125,001 and £250,000, 5% between £250,001 and £925,000, 10% on £925,001-£1.5m, and 12% on any value above £1.5m.
Stamp duty rates are different in Scotland and Wales, while landlords pay an extra 3% of stamp duty when they purchase a buy-to-let property in England and Northern Ireland.
The government is reportedly set to raise the threshold at which homebuyers start paying stamp duty in England and Northern Ireland.
This could jump from £125,000 to £300,000 but it may even rise to £500,000.
That would enable some less expensive homes to be taken out of stamp duty.
Experts have said this stamp duty holiday will encourage more homeowners to move, which would kickstart the housing market.
The changes are likely to be announced on Wednesday in the chancellor's summer statement, but the increase will probably only last six months.