In his budget announcement this week, the Chancellor extended the Stamp Duty holiday in England until the end of June 2021; as part of plans to help the economy recover from the impact of the latest Coronavirus restrictions. From 30th June – the ‘nil rate band’ for stamp duty will also be set at £250,000 – double its standard level – until the end of September.
To help you in your search for the perfect home, we’ve broken down exactly what the extension means for you.
Stamp duty land tax is a lump sum payment that those buying a property or piece of land over a certain price have to pay. The rate a buyer has to pay varies depending on the price and type of property, but generally you would expect to pay more stamp duty the higher the property is worth. Last year, the government announced that it would temporarily raise the stamp duty threshold from £125,000 to £500,000 for property sales in England and Northern Ireland.
The measures mean that home-buyers do not have to pay stamp duty tax for the first £500,000 of the money they pay for their property. That means any home-buyers purchasing a property under £500,000 will not pay any stamp duty at all. Property purchases over £500,000 will also only be taxed on their value above that amount, saving buyers as much as £15,000 on properties of £500,000 or more.
The ‘stamp duty holiday’ has been extended until the end of June – meaning buyers will continue to benefit from savings as long as their property purchase completes by 30th June 2021. Additionally, from 30th June to end of September, the ‘nil band rate’ (i.e. the rate at which you begin to pay stamp duty on your property) will be raised to £250,000.
The three-month extension to the main stamp duty holiday means that buyers who are now looking for a new home could benefit from the full savings of up to £15,000 if they complete their sales within less than four months. The additional raising of the ‘nil band rate’ means any buyers who enter the market within the next three months are very likely to benefit from savings of up to £2,500 if they complete by the end of September.
According to property website Zoopla, the extension will mean a further 234,000 sales will save an estimated £987 million on stamp duty by the end of June.
If you are interested in purchasing a new home, and would like to discuss what the stamp duty holiday could mean for you, get in touch or check out our available homes.
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