Stamp Duty Extension: What it means for buyers

Stamp Duty Extension: What it means for buyers

Following this year’s Spring Budget, Rishi Sunak announced some welcome news for the housing market with an extension to the Stamp Duty Holiday which was introduced in July last year.

The Chancellor unveiled the government’s plan to extend the tax break by three months, giving homebuyers extra time to complete their sales. There will be ‘smooth transition back to normal’ – the nil rate band will be £250,000, which is double its standard level (£125,000) until the start of October.

Following many calls to government from the property industry – Samuel Estates is confident that this extension will help many vendors get their sales over the line in time. It also means that we’re ready to work hard on any new instructions before the extensions ends – it’s all possible when you choose the right agent!

What is Stamp Duty?

When you purchase a residential property or land in England or Northern Ireland, you are charged a tax known as stamp duty. The tax applies to both freehold and leasehold properties.

How much Stamp Duty will you need to pay?

Current Stamp Duty Rates (Extension) until 30th June 2021:

  • Up to £500,000 – no stamp duty
  • £500,001 to £925,000 – 5%
  • £925,001 to £1.5m – 10%
  • Above £1.5m – 12%

The new stamp duty holiday (current extension) raises the minimum threshold at which stamp duty is charged from the standard £125,000 to £500,000.

Between July 1st and September 30th 2021:

  • Up to £250,000 – no stamp duty
  • £250,001 to £925,000 – 5%
  • £925,001 to £1.5m – 10%
  • Above £1.5m – 12%

Stamp duty rates will to return to their standard rate from October 1st 2021, these will be as follows:

  • Up to £125,000 – no stamp duty
  • From £125,001 to £250,000 – 2%
  • £250,001 to £925,000 – 5%
  • £925,001 to £1.5m – 10%
  • Above £1.5m – 12%

First Time Home Buyers

First time home buyers are still exempt from paying stamp duty for the first £300,000 of the purchase price. Most home buyers will be unaffected unless they purchase property worth over £500,000.

This is great time to buy and sell your property and we anticipate with much confidence that the first half of this year will remain busy with lots of market activity and opportunity.

Further welcome news was also announced by the chancellor as part of this week’s budget regarding the mortgage guarantee scheme which we feel will make routes to purchase much more accessible for first time buyers.

Source content: money.co.uk