March Budget sees extension to Stamp Duty Holiday

Insights - 05/03/2021

March Budget sees extension to Stamp Duty Holiday

The end of the current “stamp duty holiday” (as covered in our blog of 9 July) has been extended from 31 March 2021 to 30 June 2021, giving buyers a further three months to take advantage of the scheme and save up to £15,000 in Stamp Duty Land Tax (SDLT) as no SDLT will be payable on the first £500,000 of the purchase price.

Further to this, there will be a tapering off of the scheme from 30 June to 30 September 2021 whereby no SDLT will be payable on the portion of the purchase price up to £250,000.00. This means that buyers can still save up to £2,500.00 until 1 October when the nil rate band will reduce back to the pre-holiday level of £125,000.00.

Stamp duty thresholds until 30 June 2021

Property Value SDLT rate
Up to £500,000.00 Zero
The next £425,000.00 (portion from £500,001.00 to £925,000.00) 5%
The next £575,000.00 (portion from £925,001.00 to £1.5million) 10%
The remaining amount 10%

Stamp duty thresholds from 1 July 2021 to 30 September 2021

Property Value SDLT rate
Up to £250,000.00 Zero
The next £625,000.00 (portion from £250,001.00 to £925,000.00) 5%
The next £575,000.00 (portion from £925,001.00 to £1.5million) 10%
The remaining amount 10%

Stamp duty thresholds from 1 October 2021

Property Value SDLT rate
Up to £125,000.00 Zero
The next £125,000.00 (portion from £125,0001 to £250,000.00) 2%
The next £625,000.00 (portion from £250,001.00 to £925,000.00) 5%
The next £575,000.00 (portion from £925,001.00 to £1.5million) 10%
The remaining amount 10%

As a worked example, a property costing £500,000.00 would see the purchaser paying no SDLT if completion takes place before 1 July 2021, £12,500.00 if completion takes place between 1 July 2021 and 30 September 2021 and £15,000.00 if completion took place on or after 1 October 2021.

First time buyers

If you purchase your first home from 1 July 2021 you will be eligible for first time buyer relief. This means that no SDLT will be payable on the first £300,000.00 and SDLT will be charged at the portion from £300,001.00 to £500,000.00.

If the price is over £500,000 you will follow the rules for those who have bought a home before.

Additional properties

These will remain subject to a 3% surcharge if you will own more than one property on completion and you are not replacing your main residence.

Non-UK resident purchasers

From 1 April 2021 purchasers of residential property in England and Northern Ireland who are not resident in the United Kingdom will pay higher rates of SDLT. These rates will be 2% higher than those that apply to purchases made by UK residents.

All purchasers can calculate the amount of SDLT that they can expect to pay based on the expected date of completion using the UK government’s online stamp duty calculator .

If you have any questions about stamp duty or you have a query about a residential property please contact our team.

Disclaimer:

Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.