As the country was coming out of its first coronavirus lockdown in July 2020, the Chancellor Rishi Sunak announced stamp duty would be suspended. Following an extension, it has been confirmed the so-called ‘stamp duty holiday’ ends on 30th June.
The stamp duty holiday was launched to help the UK housing market to overcome the obvious challenges of buying and selling homes under such severe restrictions. It has been roundly viewed as a huge success both in terms of the volume of sales made and the increase in house prices all over the UK.
However, as the stamp duty holiday is about to end, we thought it would be useful to outline how the end of the stamp duty holiday could affect you.
Historically you would pay Stamp Duty on any residential property or land purchase over £125,000 in England or Northern Ireland.
Stamp Duty would be charged when you purchased a freehold property, a new or existing leasehold property, a property through a shared ownership scheme or when you transferred land or property in exchange for any form of payment.
During the stamp duty holiday, the threshold was raised to £500,000 or more but from 1st July stamp duty will return to its previous levels, albeit in two steps:
Step 1: From 1st July – 31st September you will need to pay stamp duty on houses costing over £250,000.
Step 2: From October 1st, 2021, the stamp duty will return to normal and will need to be paid on houses costing over £125,000.
These thresholds only apply to residential properties. For non-residential (i.e. commercial) properties, you will need to pay stamp duty on anything costing £150,000 or more during both steps.
And if your purchase relates to a second home or a property you won’t be using as your primary residence you will need to pay an extra 3% Stamp Duty on top of the stamp duty rate at that time on purchases of land or property costing more than £40,000.
From July 1, 2021, you can claim relief (a discount) on your stamp duty if you, or anyone else that you are buying the property with is a first-time buyer. You can also claim relief if you bought your first home before July 8, 2020.
If you are a first-time buyer, buying a second or investment property or are buying in the UK despite being based overseas, we’d strongly suggest you confirm the actual figure so you can factor the cost into the overall cost of your purchase.
If you are planning to move home in the near future, we are here to make sure your next move goes as smoothly as possible. If you’d like to discuss an upcoming sale or purchase, please email me at Jeremy.Tulloch@collinshoy.com or call me on 0208 515 6600.