As of 1 July 2021, you will not have to pay stamp duty on the first £250,000 of any property purchased as long as the purchase is completed before 30 September 2021.
Stamp duty is normally payable on any property valued at over £125,000, but the holiday was introduced by Chancellor Rishi Sunak in July 2020 to give a boost to the housing market, which appeared to be grinding to a halt at the time. The tax break was originally due to come to an end on 31 March 2021. However, it was extended as it became evident that thousands of buyers were unlikely to be able to complete their purchases in time due to delays caused by the COVID pandemic, staff shortages and the extra demand caused by the holiday itself.
Caroline Murray, partner and head of Graysons’ conveyancing department, says:
“As expected, the extension of the stamp duty holiday until 30 June/30 September appears to have led to a further surge in the housing market and we have no indication from the government that it will be extended further. Anyone wishing to take advantage of the holiday will need to move quickly. We would normally anticipate that it may take between 8-12 weeks for a sale/purchase to complete from receipt of initial documentation. However, conveyancers are extremely busy at present and there may still be some delays caused by COVID-19 related factors and current pressures on professionals, mortgage lenders, local authorities and search providers.”
Unless there is a further extension to the stamp duty holiday, or some other government scheme is introduced, from 1 October 2021 stamp duty will once again become payable on (main residence) properties over £125,000 at between 2% and 12%, depending on the value. First-time buyers will continue to benefit from increased stamp duty thresholds whereby stamp duty only becomes payable on property over £300,000, then 5% on anything above that, up to £500,000. Stamp duty is then payable by first-time buyers at the standard rate on the whole value of the property. At the end of the stamp duty holiday, the enhanced rate of stamp duty will once again become applicable on all second homes/buy-to-let property, irrespective of value – starting at 3% and rising to 15%.
Author: Caroline Murray, partner and head of the property department.