Stamp duty tax: waiver to end
Many buyers are currently enjoying the extended stamp duty tax holiday in England and Northern Ireland before it comes to an end on 30th September…
When do stamp duty rates change?
It’s been over 14 months since the temporary reduction of Stamp Duty Land Tax. The change has meant there is no stamp duty tax to pay for first-time buyers and home movers on purchases priced at or below £250,000 before 30th September 2021. The reduction still offers buyers a potential saving of up to £2,500.
The stamp duty holiday has already been extended once, from 31st March 2021 to 30th June 2021. From 1st July 2021, there will be a tapered return to previous stamp duty rates, with the nil-rate band lowered from £500,000 to £250,000 until the end of September. From 1st October, it will return to £125,000.
The amount of stamp duty tax you’ll need to pay depends on a wide range of factors, including how much you pay for the property, the location of the property, whether you have a UK passport, when you buy and whether you’re a first-time buyer. It also depends on whether you’re buying a main home, a holiday home or an investment property.
Property market going forward
The demand for more living space seems to be here to stay. The pandemic has changed how lots of us work or view our homes. Many homeowners want more space to work remotely or want a second home as a staycation property.
There are also plenty of first-time buyers looking to get on the property ladder, meaning the demand for smaller properties remains high, which is driving the lower end of the market.
Some characteristics from the Stamp Duty holiday are likely to be taken forward, but it hasn’t changed the essential makeup of the market. The existing strength of the UK housing market before the pandemic will mean that the bubble is unlikely to burst any time soon.
We know the current plan is for tax free stamp duty threshold to drop from £250,000 to the nominal £125,000 rate by 30th September 2021.
Since the cut in stamp duty tax, property transactions have hit an all time high with estate agents, conveyancers, IFAs and financial institutions being overloaded with enquiries.
From 1st October 2021 we may slowly begin to see the affects of the removal of the stamp duty holiday.
What are your thoughts on the stamp duty tax holiday ending?