An important question in the property market at the moment for many is ‘when does the stamp duty holiday end?’
You may be unaware of the stamp duty holiday, or you might have benefitted from it over the last 6 months. To raise awareness, we have put together this article to explain what the stamp duty holiday involves and when it will finish, so you can be clued up on the hottest topic in The UK property market at the moment.
What is Stamp Duty
Stamp duty is the tax paid by people when they purchase residential properties or a piece of land in the UK. This can vary slightly across The UK as in England and Northern Ireland, buyers will pay Stamp Duty Land Tax (SDLT). Whereas in Scotland you will pay Land and Buildings Transaction Tax and in Wales buyers pay Land Transaction Tax.
The amount of stamp duty tax will depend on where you live in The UK and the price of the property being purchased (as well as other factors such as if it is a second property or not).
What does the Stamp Duty Holiday Involve?
In a move to help buyers that have taken a financial hit due to the COVID-19 crisis, the government has temporarily increased the stamp duty threshold to £500,000 for property sales in both England and Northern Ireland. This, therefore, means that anyone purchasing a main residence costing up to £500,000 will not have to pay any stamp duty tax.
For more expensive properties, you will just be taxed on their value above £500,000. The portion of the price over £500,000 will be taxed at 5% if the property price is between £500,001 to £925,000 and at 10% for properties priced between £925,001 to £1.5 million. For properties priced over £1.5 million, you will be taxed at 12% for stamp duty.
Second home buyers and landlords are also eligible for the stamp duty holiday, however, you will still have to pay the extra 3% of tax (on the full purchase price) which was charged under the previous rules.
As the property market was initially hit by lockdowns, the government sanctioned the Stamp Duty Holiday to boost housing sales in The UK (and help the economy generally too). The result of the Stamp Duty Holiday has led to high demand in purchasing properties to benefit from the tax break available, which has improved the health of the property market too.
The Stamp Duty Holiday has encouraged people to accelerate their plans in purchasing property to benefit from the tax break. There are those in the housing market that are concerned that demand could reduce again once the tax break finishes, this we will have to wait to see. It is possible that there might be an extension or perhaps that the previous First Time Buyer exemption up to £300000 might come back into effect. For this we will have to wait and see…
When does The Stamp Duty Holiday finish?
The main question you will be asking is when does the stamp duty holiday finish? The deadline of the Stamp Duty Holiday is the 31st of March 2021, so there are just over 2 months to go of being able to purchase a property up to £500,000 free of Stamp Duty payments.
There have been calls for the government to extend the stamp duty holiday period (as mentioned above), however, there are currently no plans of any extensions after the stated deadline passes.
So, now you are aware of the Stamp Duty Holiday end date it is over to you to take advantage of this period while it is still available.
If you have any questions regarding stamp duty when purchasing a property visit our stamp duty page or contact us today for further information.
Stuart
correct at writing 25th January 2021 (since updated via a separate post made due to changes 8th March 2021)
Beds 01525 877650 or Herts/Bucks 01442 252040 or Mobile 07710 770969
email: advice@sbms-online.co.uk
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