You may have recently heard about the stamp duty holiday for house buyers in England and Northern Ireland and that it has been extended by the government, to enable those purchasing a home to have extra time to complete their purchase if they are in a home purchasing chain.

What is stamp duty?

Stamp duty, or stamp duty land tax (SDLTX) is a property transaction tax that house buyers pay when they purchase a property, usually over the value of £125,000.

The amount that is liable to be paid is a percentage of the purchase price of the property and increases with the value of the property.

What is the stamp duty holiday?

During the pandemic, the government suspended stamp duty payments to help house buyers and recently that suspension was extended to 30th June 2021, from 31st March 2021.

But, instead of instating the full threshold of stamp duty, it has been reduced for a further period of time. Now, from the 1st July until 30th September, there is a reintroduction of stamp duty, but at a reduced threshold of £250,000, instead of the usual £125,000.

How much stamp duty do I have to pay?

Up until the 30th September 2021, there is no stamp duty to pay on the first £250,000 of the purchase price of a property.

Here are the stamp duty amounts that apply up until 30th September, and then after, from 1st October:

Property value

SDLT rate*
Up to 31st Sept From 1st Oct
Up to £125,000 Zero Zero
The next £125,000 (the amount from £125,001 to £250,000) Zero 2%
The next £675,000 (the amount from £250,001 to £925,000) 5% 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10% 10%

*Please note that the stamp duty rates quoted apply to purchase of main residences only. Different rates apply to purchases of additional property.

Is the stamp duty holiday rate the same for first-time buyers?

No. The stamp duty rates are different for first-time buyers. From 1st July 2021, if you are a first-time buyer and anyone you are buying with is a first-time buyer, and the property is under £500,000, you will qualify for the following rates:

Property value SDLT rate*
Up to £300,000 Zero
Between £300,001 and £500,000 5%

*Please note that the stamp duty rates quoted apply to purchase of main residences only. Different rates apply to purchases of additional property.

If the property is over £500,000, even if you are a first-time buyer, you will not qualify for any discount.

What can I do to speed up my house purchase so I qualify for the stamp duty discount?

Often, house purchasing can be speeded up by being as organised as possible. Here are our suggestions for a rapid house purchase:

  • Get your solicitor on the case to get your property searches underway
  • If you have any queries prior to the contracts being drawn, make sure you raise them, to save time later sorting out issues
  • As soon as you can, arrange with your mortgage adviser to get your agreement in principle

If you are worried about missing the deadline and want to get things moving with a house purchase, don’t delay! We are here to help and advise you as your friendly, efficient and knowledgeable mortgage advisers.

Get in touch, we’re ready to help you.

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