The Stamp Duty holiday ends on 31st March 2021. Purchases need to complete on or before this date to benefit from the reduced rates.
Please be aware that due to lenders backlogs and the pressure on solicitors, the average time from putting in an offer to completion is approximately 16 weeks.
The Christmas and New Year period will also slow the process down, so please keep this in mind when budgeting for your fees and timescales.
The Chancellor has today announced a stamp duty holiday to start immediately and run until 31st March 2021. Under the changes, homebuyers will now pay no stamp duty on their main homes up to the £500,000 threshold.
The average stamp duty saving will be £4,500, with nine out of ten buyers this year now paying no stamp duty at all on purchases.
The changes do not include second homes.
One of former Chancellor George Osborne’s most popular moves was the abolition of the ‘slab’ system of stamp duty land tax. Prior to the change in 2014 buyers paid stamp duty based on the price of the property, but it was applied to the whole value of the home.
This meant that if your property was just £1 above one of the thresholds you’d have to pay far greater levels of stamp duty compared with a house that was £1 cheaper and just below the threshold. But now home buyers pay a graduated rate so that the higher rates only apply to the amount over each threshold. Much better!
In England and Northern Ireland stamp duty is more commonly known as Stamp Duty Land Tax, In Wales it is referred to as Land Transaction Tax and in Scotland it is known as Land and Buildings Transaction Tax. Depending on the country in which you are purchasing a property, different rules and tax calculations will be applied.
England and Northern Ireland
Based on a traditional residential mortgage for the average English property value of £243,639, according to the latest UK House Price Index, your total for stamp duty would be £2,372.
Based on a traditional residential mortgage for the average Scottish property value of £148,952, according to the latest UK House Price Index, your total for stamp duty would be £79.
Based on a traditional residential mortgage for the average Welsh property value of £156,495, according to the latest UK House Price Index, your total for stamp duty would be £0.
However, if you’re a first-time buyer in England and Northern Ireland purchasing a home for £300,000 or less you’ll be exempt from stamp duty altogether. You’ll be charged 5% on anything over £300,000 up to £500,000 – anything over £500,000 and you won’t be entitled to discounted rates. These discounted rates also don’t apply for first-time buyers in Wales whereas first-time buyers in Scotland are exempt up to £175,000.
Also, different stamp duty thresholds and different tax rules and calculations will apply to second properties, buy-to-let properties and other factors like whether it’s shared ownership.
If you want to calculate how much stamp duty you’d have to pay depending on your circumstances, use this handy tool https://bit.ly/2REZVBE for free!
If you’d like more information or to discuss your buying options contact one of our advisers today.
From April 2016, buyers of Buy-To-Let properties and second homes will have to pay an extra 3% stamp duty on each of the bands. There will also be an additional band of £0-£40,000 introduced with 0% stamp duty to pay.
Any buyers who complete their purchase before the 1st April 2016 will still fall under the current stamp duty rates.