Stamp Duty Holiday Extension: What does it mean for buyers?
In the eagerly anticipated Budget announcement on March 3rd, 2021, Chancellor of the Exchequer Rishi Sunak extended the temporary stamp duty holiday in England and Northern Ireland from the 31st March until the end of June. The extension graces first-time buyers and those purchasing their second homes with an additional 3 months to benefit from the sought-after government scheme.
What is a Stamp Duty Holiday?
When you buy a property, or land, you must pay Stamp Duty Land Transaction Tax, or Stamp Duty Land Tax (SDLT) for short, on any property over £125,000 or £300,000 for first-time buyers.
In a bid to boost the housing market after the effects of the pandemic, the Chancellor announced a temporary stamp duty holiday on July 8th, 2020 - increasing the 0% tax rate up to £500,000 for first time buyers, home-movers and those purchasing an additional property, providing savings of up to £15,000.
Those looking to purchase a second home or a buy-to-let property, however, must pay a 3% surcharge on top of the current stamp duty rates. From April 1st 2021, non-residents of the UK will have to pay a surcharge of 2% on top of the basic stamp duty rates, they must also pay the 3% for an additional property if applicable.
What are the current Stamp Duty rates?
Trying to understand the current stamp duty rates can be quite confusing as they differ for first time buyers, home movers and for those purchasing an additional property. To help explain, we’ve created an easy-to-use graphic below to help you work out the percentage of stamp duty you will need to pay when purchasing your property.
When will the Stamp Duty Holiday end?
The Stamp Duty holiday will end on the 30th June 2021 for the first £500,000 of the overall property price. Between the 1st July to 30th September, the Stamp Duty holiday will only apply to the first £250,000 of the property price, and from 1st October onwards, the Stamp Duty rates will return to normal.
At LiFE Residential, we appreciate Stamp Duty Land Tax can be confusing and that everyone is in a different buying position. If you are looking to purchase a property, please don’t hesitate to contact our sales team who will be able to explain everything in more detail.