Stamp Duty Land Tax for England and Northern Ireland changed on July 1, which marks the phasing out of the tax holiday.
For those buying a property this means they will now pay Stamp Duty for purchases above £250,000.
The Stamp Duty will now be charged at the following rates:
- £0 - £250,000 = 0%
- £250,001 - £925,000 = 5%
- £925,001 - £1,500,000 = 10%
- £1,500,000+ = 12%
However, from 1 October 2021, the rates will revert to the normal levels and will affect property valued from £125,001:
- £0 - £125,000 = 0%
- £125,001- £250,000 = 2%
- £250,000 - £925,000 = 5%
- £925,000 - £1,500,000 = 10%
- £1,500,000+ = 12%
Jon Coles, who is the joint head of the Residential Property team at Phillips said: “It’s been a tumultuous 16 months for the residential property sector from where we have gone from a temporary market closure to the huge release of pent-up demand.”
“The Stamp Duty Holiday announced by the Chancellor Rishi Sunak back in July 2020 certainly had a huge impact, which has been a driving force behind the property market, giving homebuyers and investors an opportunity to save thousands of pounds.”
What does the Stamp Duty Holiday mean?
The aim of the Stamp Duty Holiday was to boost the property market by helping buyers whose finances were affected by the pandemic, offering on average a saving of £4,500.
Landlords and also second-home buyers were also able to benefit, although they still had to pay the extra 3% Stamp Duty they were charge under the previous rules.
Changes to the Stamp Duty Holiday
The Stamp Duty Holiday was initially going to end on 31 March 2021. However as demand for property continued to grow unabated at the beginning of this year many home buyers faced missing the deadline completely, the Chancellor decided to extend the tax holiday with a gradual easing in his Spring Budget in March 2021.
Jon said: “From 1 July, the nil band rate dropped from £500,00 to £250,000. This means that anyone buying a property above this will not be exempt from the Stamp Duty Land Tax.
“This threshold will remain in place until the end of September. Therefore, from 1 October, anyone buying a property worth more than £125,000 will have to pay the Stamp Duty Land Tax.”
Stamp Duty and First-Time Buyers
Anyone buying a property for the first time will not have to pay Stamp Duty for property up to £300,000. For properties up to £500,000 the Stamp Duty rate is 5%.
If your property costs more than £500,000 then there will be no first-time buyer exemption and the standard rates will apply.
To see a full breakdown of the rates, please visit: www.gov.uk/stamp-duty-land-tax/residential-property-rates
We are here to help
Jon and his colleagues in the Residential Property Team at Phillips can advise you about the Stamp Duty Land Tax and guide you through what can often seem like a daunting process, sharing their knowledge and expertise, while dealing with your transaction in the most efficient way possible.
You can also click here to request a conveyancing quote online.
This article is current at the date of publication set out above and is for reference purposes only. It does not constitute legal advice and should not be relied on as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.