Stamp Duty Holiday Deadline Approaching
Published: 13/01/2021
On 8 July 2020, Chancellor Rishi Sunak announce that there would be a Stamp Duty Holiday on property purchases below £500,000 until 31 March 2021.
With that in mind, we take a look at what Stamp Duty is, the changes that have come as a result and what the current savings available to purchasers.
What is stamp duty?
Stamp Duty Land Tax is a tax payable when you buy houses, flats and other land and buildings over a certain price in the UK. In England and Northern Ireland, buyers pay Stamp Duty Land Tax, in Scotland buyers pay Land and Building Transaction Tax and in Wales buyers pay Land Transaction Tax.
The amount payable to the government depends on the purchase price and whether the property is being purchased as a main residence or additional property. The current Stamp Duty Holiday only applies to properties based in both England and Northern Ireland.
The changes to stamp duty
Prior to the Stamp Duty Holiday being announced, purchasers were required to pay Stamp Duty on property valued at £125,000 and over, or if you were a first-time buyer then any property that is valued over £300,000.
Following the introduction of the Stamp Duty Holiday, this has raised the threshold to £500,000 for property purchases in England and Northern Ireland. This means that anyone looking to complete a main residence purchase with the property value up to £500,000 will avoid having to pay any Stamp Duty, until 31 March 2021.
The Stamp Duty Holiday was introduced by the government to try and help boost the property market, which had been halted due the global coronavirus pandemic and associated lockdown restrictions.
How much stamp duty will be payable during the holiday
If the property your client is looking to purchase is going to be their main home, they won’t be required to pay any Stamp Duty fees on it at all, if it costs £500,000. See the table below for further details:
|
Property or lease premium or transfer value |
SDLT rate |
|
Up to £500,000 |
Zero |
|
The next £425,000 (the portion from £500,001 to £925,000) |
5% |
|
The next £575,000 (the portion from £925,001 to £1.5 million) |
10% |
|
The remaining amount (the portion above £1.5 million) |
12% |
Higher rates for additional properties
The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.
|
Property or lease premium or transfer value |
SDLT rate |
|
Up to £500,000 |
3% |
|
The next £425,000 (the portion from £500,001 to £925,000) |
8% |
|
The next £575,000 (the portion from £925,001 to £1.5 million) |
13% |
|
The remaining amount (the portion above £1.5 million) |
15% |
GWlegal can help you ahead of the deadline
Although it’s a few months away yet, the 31 March 2021 deadline is slowly creeping up on us all. If your clients wish to take advantage of the current savings available, then it is advisable to get the purchase process underway no later than the end of January 2021, to allow us time to help mitigate any delays caused by third party timescales. We are already on notice that local authorities are expecting search demand to soar which is likely to protract their turnaround times even further than their current extended timescales.
Don’t forget, GWlegal are available and ready to help you with this today, simply get in touch with our experienced conveyancing team to get started. We also have a range of deals, offers and discounts available on our services every month!
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Content correct at time of publication