From the first of October 2021 the Stamp Duty rates in England will return to their previous rates as the tax holiday introduced in June 2020 finishes.
Other than First Time Buyers, who will pay no Stamp Duty on the first £300,000, all other purchasers will go back to a tiered system of charges.
Our Residential Conveyancing department looks at the details and impact of the tax holiday.
“Stamp duty is a tax paid on property purchases and since June 2020 buyers have benefited from a Stamp Duty Holiday Period introduced by the Chancellor.
“This has been a tiered system and has resulted in savings up to £15,000 for home buyers during that period.
“Landlords and second-home buyers also made use of the tax cut, however they were still liable to pay the extra 3% of stamp duty they were charged under the previous rules.
“The initiative was designed to maintain momentum in the housing market within the unknown territory we were entering at that time due to Covid-19.
“This has certainly had the desired effect judging by the volume of transactions all solicitors have processed over the last 15 months, and with estate agents reporting a surge of interest as buyers and sellers rushed to complete property deals before the scheme ends.”
From 1 October 2021 house purchasers start paying stamp duty for properties over £125,001 as follows:
The Stamp Duty rates will be:
£0-£125,000 = 0%
£125,001-£250,000 = 2%
£250,001-£925,000 = 5%
£925,001-£1,500,000 = 10%
£1,500,000+ = 12%
“It should be noted that there is still an element of the stimulus that will benefit First Time Buyers in that there will be no Stamp Duty Payable by them on the first £300,000 of any purchase up to a value of £500,000 with then a 5% Rate being payable between the value of £300,001 and £500,000.
“Maintaining the incentive for First Time Buyers should have the effect of keeping the housing healthy as all transactions have to start with a purchaser at the bottom of the chain.
“Property experts have reported a lack of space, low supply, increased savings and low interest rates on mortgages have resulted in house prices increases seen during the year, and these factors are still in place to maintain activity in the market going forward.”
Wake Smith Solicitors deal with all aspects of conveyancing. For further information and about house sales, purchases and stamp duty call 0114 266 6660.
