End of Stamp Duty Holiday: first deadline fast approaching
The Stamp Duty holiday in England will end on 30th June 2021, lowering the nil rate band from £500,000 to £250,000 for all but first-time buyers, who have a threshold of £300,000 before stamp duty is due. The rates will then change again in October to return to the standard amount pre-Covid-19.
The temporary nil rate for Stamp Duty Land Tax (SDLT) was introduced in 2020 when the UK went into lockdown amid the global Covid-19 pandemic, allowing anyone to purchase a primary residential property up to the value of £500,000 without paying Stamp Duty. From 1st July to 30th September 2021, the nil rate band will be reduced to £250,000 and then will be reduced again to return to the standard threshold of £125,000, again, except for first-time buyers who have a threshold of £300,000.
The rate of SDLT that applies to a purchase depends on the date that the purchase is completed and not the date that contracts are exchanged. This means that many people who are in the process of buying a house now could miss out on the extra relief but still have the opportunity to benefit from the £250,000 nil rate if they complete by October. The rate above £250,000 will be 5% on the next £675,000 (up to £925,000), 10% on the next £575,000 (up to £1.5 million), and 12% on the value above £1.5 million.
The adjustments to the Stamp Duty nil rate apply to main residences. Additional properties, for which there is no nil rate unless they are bought for less than £40,000, incur a 3% tax up to £500,000 until 30th June. This then changes to 3% up to £250,000 until October.
Anyone hoping to take advantage of the lower Stamp Duty rates, whether buying a main residence or an investment property, should think about moving quickly. Property purchases can take a number of months, and there are just over three months left until the SDLT rates revert to the standard amounts.
June 30th is the first Stamp Duty holiday deadline to pay attention to if you’re currently in the process of buying a property. Now is the time to try and speed things up and perhaps try to set a completion date before this deadline. If you miss this first deadline, you can still benefit from the Stamp Duty holiday, with a further three months to take advantage of the £250,000 nil rate. To check how much you’re going to pay, you can use the Stamp Duty Land Tax calculator.
If you have yet to find the perfect property, Pick My Pad can help you to speed up your search. Our estate agents will listen to your wants and needs and suggest properties for your shortlist. Please contact us on 0161 790 3999 or use our contact form. If you’re currently viewing properties, you can also speed things up by getting other necessities out of the way, such as lining up a solicitor and talking to a mortgage broker. This will put you in a good position to move quickly once you find the right property.