To the relief of many home buyers, the Chancellor Rishi Sunak extended the Stamp Duty Land Tax holiday by three months.
He made the announcement in his Budget on 3rd March, when he told MPs that the move was "to smooth the transition back to normal.”
Prior to this, the tax holiday was due to end on 31st March, but now it will remain until 30th June.
Mr Sunak also said that from 1st July until 30th September, those that are purchasing a property for £250,000 or less will still benefit from the tax holiday, with normal rates returning to their usual level of £125,000 from 1st October.
The Stamp Duty Land Tax Holiday was introduced in July 2020, to help buyers in England and Northern Ireland who might have taken a financial hit because of the Coronavirus pandemic. It was also intended to boost a property market adversely affected by the first lockdown.
Prior to this the tax was paid on land or property sold for £125,000 or more, while first-time buyers did not pay any stamp duty up to £300,000. The tax holiday replaced the first-time buyer discount.
Zoë Baxter, who co-heads the Residential Property team at Phillips Solicitors, explains: “Basically, anyone wishing to take full advantage of the extension has to now complete on or before 30th June.”
“From 1st July, the first £250,000.00 of a purchase price will be free of Stamp Duty Land Tax, with a rate of 5% being imposed on the portion of the purchase price from £250,001 to £925,000. Pre-tax holiday rates will return from 1st October.”
To see a full breakdown of the rates, visit www.gov.uk/stamp-duty-land-tax/residential-property-rates
However, Zoë warns that for many people there will inevitably be a race to complete their transactions before the end of the new tax holiday.
“While this can be frustrating and stressful for all concerned, it is worth remembering that there are many factors which are outside of our control which can delay a completion and missing the deadline,” said Zoë.
“These can range from delays in chains with regards to mortgage paperwork, search results and valuations. We will of course do our utmost to help our clients move ahead of the new deadline.”
Zoë and her colleagues in the Residential Property team at Phillips Solicitors 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.