Stamp Duty Holiday – EXTENDED
3rd March 2021
There was great news for homebuyers today as chancellor Rishi Sunak extended the stamp duty holiday for a further 3 months, until 30th June 2021. As has been the case since 8 July 2020, you’ll only start to pay stamp duty on the amount that you pay for the property above £500,000 (in England & Northern Ireland). These rates apply whether you are buying your first home or have owned property before.
Furthermore, the end of the holiday will be gradual, so for the following 3 months ending 30th September 2021, the nil rate band (the amount before stamp duty is charged) will reduce to £250,000, before returning to the usual level of £125,000 from 1st October 2021. So if your transaction can’t quite squeeze in the current holiday, there’s another 3 months where you’ll still make a savings.
The chancellor had been urged to push back the deadline as many people have been left scrambling to complete their transactions before the end date – with the property website Rightmove estimating 100,000 could miss out.
You can use the table to work out the stamp duty due, but in simple terms a property worth £400k will have ZERO stamp duty payable, rather than £10,000 and a property at £500k will also be ZERO, rather than £15k.
If you buy a property for more than £500k then your total stamp duty bill will be reduced by £15k, with no upper limit on the purchase price to benefit from the saving.
| Property or lease premium or transfer value | SDLT rate |
|---|---|
| Up to £500,000 | Zero |
| The next £425,000 (the portion from £500,001 to £925,000) | 5% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
| The remaining amount (the portion above £1.5 million) | 12% |
Higher rates for additional properties
The 3% higher rate for purchases of additional dwellings (such as second homes and Buy-to-Lets) still applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021. This means that although the 3% surcharge still applies, a discount of up to £15k is available on these purchases too – which include properties purchased by limited companies.
So factoring in the extra 3% the following rates now apply for additional dwellings and limited company purchases:
| Property or lease premium or transfer value | SDLT rate |
|---|---|
| Up to £500,000 | 3% |
| The next £425,000 (the portion from £500,001 to £925,000) | 8% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 13% |
| The remaining amount (the portion above £1.5 million) | 15% |
If this has got you thinking then feel free to get in touch – we’d be delighted to help you understand your options.