The first lockdown seems like a lifetime ago for many of us. Weather, furlough and of course COVID were top of Google searches. Along with these the stamp duty holiday was announced and introduced as the lockdown eased.
The aim was to give the property market a boost much needed after quiet times of uncertainty and for a period, a virtual complete shutdown. Few could have predicted the explosion of house prices in the following months. The tax break allowed buyers to avoid paying stamp duty on the purchase for the first £500,000.
The initial plan to end the stamp duty holiday on 31st of March 2021 was scrapped by the government after many property experts advised against it. The extension of the stamp duty holiday was very important for those who were buying houses in a chain and they wouldn’t be able to complete the sale before the end of March as many surveyors and solicitors were just too busy. The new deadline was set for the 30th of June, which meant that buyers had additional 3 months to complete the transaction. This helped many who may have missed the original deadline save thousands of pounds due to being able to complete it on time. This was especially important as during the pandemic it was taking on average 295 days to complete a house purchase.
From July the 1st 2021, the stamp duty rules have changed and began phasing out. Buyers were still benefitting from a tax break but the top limit of property value has dropped from £500,000 to £250,000 per property. With high street lenders offering 95% loan to value, mortgages and house prices were steadily rising over the course of last year forcing buyers to make quick decisions. ONS reports that house prices rose 13.2% in the year to June 2021. The final stage of phasing out lead to an end of stamp duty holiday on the 30th of September. From October 2021 stamp duty rates will return to the pre lockdown ones. That means that you can purchase residential property of value up to £125,000 tax-free. For those who never owned a property tax-free amount remains at a high £300,000 limit which is nearly £50,000 more than the average house price in the UK in July according to ONS.
To calculate your stamp duty land tax go to: https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/
It’s not too late!
Whilst the deadline for the latest stamp duty holiday is the 30th of September 2021 we are able to buy houses in as quickly as 3-4 days so if you need to sell a property to take advantage of the holiday please do get in touch with our team.