What does the stamp duty holiday mean for your UK property investment?

September 16, 2020

Are you considering buying an investment property in the UK? If so, the stamp duty holiday introduced on 8 July 2020 could mean you have to pay less money for your buy-to-let investment. As such, we’ve taken a look at what it is and how much you could save. 

“The stamp duty holiday was introduced to save the UK housing market from stumbling as a result of the coronavirus pandemic and its effective halting of property purchases earlier this year. It has done much to invigorate the market, with both owner occupiers and investors looking to purchase properties while they can make a saving.”

Dale Anderson, Managing Director, Fabrik Invest

What is the stamp duty holiday?

The stamp duty holiday is an exemption to the usual rates of stamp duty land tax that apply to the purchase of residential property in England by individuals. It came into effect on 8 July 2020 and will apply until 31 March 2021. 

What rates of stamp duty now apply?

The rate of stamp duty that you need to pay depends on how many properties you own. Most investors have to pay stamp duty at a higher rate as the properties they purchase are in addition to their main residence. 

Stamp duty rates for an investment property therefore now stand at: 

  • Property costing up to £500,000: 3%
  • Portion of property costing from £500,001 to £925,000: 8%
  • Portion of property costing from £925,001 to £1.5 million: 13%
  • Any remaining portion above £1.5 million: 15%

As most buy-to-let properties in England cost less than £500,000, the majority of investors will have to pay stamp duty at just 3% when making their purchase. 

How much could I save? 

Before the stamp duty holiday, the tax would kick in for any property costing £125,000 or more. Even with the 3% surcharge for those buying investment properties, this means a potential saving of up to £15,000, based on a £500,000 property purchase. 

“The potential savings resulting from the stamp duty holiday are significant, which is why many investors are choosing to purchase buy-to-let homes now, before the window closes on 31 March 2021. Initiatives like this don’t come along often, so it pays to act while the opportunity exists.”

Dale Anderson, Managing Director, Fabrik Invest

What opportunities are available? 

If you’re looking to capitalise on the stamp duty holiday, there are plenty of buy-to-let opportunities available in key investment hotspots. Chatham in Kent, to the south east of London, is one such hotspot. 

Chatham Docks is undergoing a £650 million regeneration, including the addition of 199 waterfront apartments at X1 Chatham Water. Sitting at the gateway to the River Thames, the flagship development is due to complete this year. 

The Peel Group regeneration has already seen £100 million invested in the area, with a further investment of £200 million along the Kent coastline due over the next five years.

X1 Chatham Waters offers one-, two- and three-bedroom apartments in a prime waterfront location that is ideal for investors looking to benefit from the London commuter belt. The development includes a private gym and 24-hour concierge. It is a fully managed investment opportunity, funded by Goldman Sachs and managed by the award-winning X1 Lettings. 
To find out more, contact the Fabrik Invest team by calling 020 8175 9891, emailing enquiries@fabrikpropertygroup.com or visiting www.fabrikinvest.com.

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Wayne Venter

International Business Development Manager

Wayne has been in the property industry for over 17 years. He started out selling residential properties in the northern suburbs of Sandton, South Africa, for one of the bigger real estate brands, before moving to a boutique, Johannesburg-based property developer. He worked at a senior level, specialising in residential developments on the north coast of KZN and various other areas of Northern Johannesburg.

Wayne moved to selling luxury, free standing homes and apartments in Sandton, Johannesburg in 2006, having joined the Country’s leading real estate brand and within six months was leading the team. In 2008, he began to focus exclusively on the luxury apartments in central Sandton, priced from approximately R2 million to R60 million. Over the years, he has also added commercial property sales and rentals to his repertoire, as well as building his own investment property portfolio between 2011 and 2018.

By 2018, realising where the South African property market was headed, he sold out of his investment property portfolio to de-risk and went looking for a real estate company to buy into. South Africa’s property market was extremely volatile at that time, so Wayne took the initiative and moved to London to work in property in the UK.

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Edward Snell

Senior Property Consultant

I live in Spanish countryside with my wife and our 11 rescue dogs.

Originally from Bedford, I have two sons, two step children & 6 grandchildren.

I have a keen interest in property investment and over the years have built up a personal portfolio for the purposes of rental income and capital growth.

I have over 20 years’ experience in property investment, both in the UK & overseas.

My other interests include animal welfare, football, motorsports, travel and music

My personality is of an even temperament and I enjoy the cut and thrust of doing deals.
I am happy and successful in what I do & take great pleasure in providing my clients with successful outcomes.

I’m a good team player but work well as an individual.

Daniel Harburn

Property Sales Consultant

Daniel had a passion for property from a young age so he began his working life by undertaking a plumbing apprenticeship for a large well known UK developer to pursue a career in construction. After qualifying he soon realised that building relationships was a preferred skill of his due to his loyal and trusting nature.

From then on Daniel launched his career in sales where he worked his way to to a high performing sales person at a creative media company. Part of Daniels success in accumulating clients over the last 10 years is put down to his diligence in customer experience.

Daniel has a keen interest in golf and also in keeping himself fit which is essential as he and his fiancé have 4 year old twins, Jacob and Sofia who keep them both on their toes.

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