Will there be a Stamp Duty Holiday Extention?
In July last year, Rishi Sunak announced that the first £500,000 of the purchase price of a main residence would be exempt from Stamp Duty until 31st March 2021 – read our previous article on the Stamp Duty Holiday here.
With that deadline fast approaching and a struggle to keep up with the surge in demand for residential property sales, the government has been urged to extend the stamp duty holiday. In a virtual House of Commons debate recently, MPs showed cross-party support for a taper or extension to the stamp duty holiday and earlier today – 15th February 2021 – it has been reported that the Chancellor, may well be considering a six-week extension to the scheme to prevent tens of thousands of potential home buyers’ sales from falling through.
Whilst this has not yet been confirmed, the limited extension would increase the scheme to mid-May with the Chancellor said to have largely rejected calls for anything longer than that.
What is Stamp Duty?
You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England and Northern Ireland.
The tax is different if the property or land is in:
- Scotland – pay Land and Buildings Transaction Tax
- Wales – pay Land Transaction Tax if the sale was completed on or after 1 April 2018
You pay the tax when you:
- buy a freehold property
- buy a new or existing leasehold
- buy a property through a shared ownership scheme
- are transferred land or property in exchange for payment, for example, you take on a mortgage or buy a share in a house
Current threshold as part of the Stamp Duty Holiday
The threshold is where SDLT starts to apply. If you buy a property for less than the threshold, there’s no SDLT to pay.
The current SDLT threshold for residential properties is £500,000. This is set to change on 1 April 2021 unless an extension is announced.
The threshold for non-residential land and properties is £150,000.
What will the Stamp Duty thresholds be after the Stamp Duty Holiday?
Following the end of the Stamp Duty Holiday, currently set for 1st April 2021, the SDLT thresholds will be:
£125,000 for residential properties
£150,000 for non-residential land and properties
These thresholds are the same as they were before 8 July 2020.
First-time buyers
As detailed on the Government website, from 1 April 2021, you’ll get a discount (relief) that means you’ll pay less or no tax if both the following apply:
- you, and anyone else you’re buying with, are first-time buyers
- the purchase price is £500,000 or less
You’ll also be eligible for this discount if you bought your first home before 8 July 2020.
How do you calculate how much you pay?
How much you pay depends on whether the land or property is:
- residential and whether you’re a first-time buyer
- non-residential or mixed-use
You can use HM Revenue and Customs’ (HMRC) Stamp Duty Land Tax calculator to work out how much tax you’ll pay.
Residential Conveyancing Solicitors in Portsmouth and Waterlooville
At Larcomes, we have a specialist team of highly experienced residential property solicitors who have the experience and resources to ensure your transaction is carried out as smoothly and cost-effectively as possible.
We recognise that buying or selling your property can be a stressful experience and our goal is to remove the stress through the provision of a friendly and quality responsive service.
If you would like to speak to us regarding the new stamp duty holiday or have any other questions concerning residential conveyancing, please contact us today on 023 9244 8100 for our Portsmouth office or 023 9224 6666 for our Waterlooville office for fast, constructive advice that is friendly and local.
Please note that this article is not intended as legal or professional advice. This is a general news article only and updates to the law may have changed since it was published