Welcome News for Homebuyers with Budget Announcement
March 12th, 2021
The Stamp Duty tax break has helped to drive a boom in property prices, and a number of homebuyers have long been calling for the measure to be extended so it was welcome news when Chancellor Rushi Sunak confirmed the long-awaited extension to the stamp duty holiday which he outlined in his Budget earlier this month.
Under the scheme, introduced by the Government in July last year, anyone who purchases a property only has to pay tax on the amount over £500,000 and with the extension now in place to 30 June 2021 it is inevitable the property market will be in demand as within minutes of the extension being announced, there were signs of house hunters rushing to see the properties available online..
What is stamp duty?
Stamp duty, also known as Stamp Duty Land Tax (SDLT), is a tax on property or land bought in England and Northern Ireland.
The rate of stamp duty ranges from 2 per cent to 12 per cent of the purchase price, depending upon how much the property costs, the purchase date and whether you are a first time buyer or multiple home owner.
England and Northern Ireland have the same rates, while Scotland and Wales have their own taxes on land, which are called Land and Buildings Transaction Tax (LBTT) and the Land Transaction Tax (LTT), respectively.
There are a number of helpful Stamp Duty calculators to help you work out how much you could be liable to pay. For example you can try this one from the Money Advice Service.
When does the Stamp Duty holiday end?
The stamp duty holiday was set to end on 31 March 2021, with its popularity leading to a backlog of sales waiting to be completed.
When Mr Sunak announced the extension in his Budget speech, he cited “the sheer volume of transactions” as a motivating factor.
He therefore announced that the £500,000 nil rate band will remain in place until 30 June, giving buyers three more months to complete.
After this date, “to smooth the transition back to normal,” the threshold will be reduced to £250,000 until 30 September. The stamp duty nil rate band will then return to its previous nil rate band of £125,000 from 1 October.
It comes as the average UK house price hit a new record high of £231,068 in February, according to figures from Nationwide.
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