Stamp Duty holiday extended
The Stamp Duty Land Tax (SDLT) holiday was set to expire on 31 March 2021 but to the relief of many in Wednesday’s budget the Chancellor announced an extension to the scheme in its current format until 30 June 2021.
In addition, from 01 July 2021 to 30 September 2021 those that are purchasing for £250,000.00 and less will still benefit from the SDLT holiday, with normal rates not resuming until 01 October 2021. So what does it mean for current and ongoing transactions?
Any client wishing to take full advantage of the extension has to now complete on or before 30 June 2021. From 01 July 2021 the first £250,000.00 of a purchase price will be free of SDLT, with a rate of 5% being imposed on the portion of the purchase price from £250,001.00 to £925,000.00. Normal, pre-holiday, rates will be imposed from 01 October 2021.
A full breakdown of the rates can be found here - https://www.gov.uk/stamp-duty-land-tax/residential-property-rates
For many it is still a race against the clock to ensure their transaction completes prior to the end of the extended SDLT holiday, but regrettably there are many factors which are outside of our control which may mean that completion before the end of the holiday is not going to be possible.
For example, delays within the chain relating to mortgage paperwork, valuations, search results and COVID related illness could all delay an agreed completion date.
If you are a first time buyer, you may still benefit from not having to pay SDLT even after the SDLT holiday deadline has passed, as the relief for first time buyers introduced prior to the current SDLT holiday will remain in place post 30 September.
This relief means that first time buyers will continue not to pay SDLT on the first £300,000.00 of their purchase price, 5% SDLT is then payable on the portion from £300,001.00 to £500,000.00 and for those first time buyers purchasing over £500,001.00 the rates are the same as those that have purchased before.
Whilst many hundreds of thousands of buyers have benefitted from the SDLT holiday since its introduction in July 2020 and more still are now set to benefit from its extension, the timescale for its removal and reintroduction of pre-holiday SDLT rates has now been set out.
For further information and should you have any questions about completing before the end of the SDLT holiday please speak with your Conveyancer.