As part of the measures to support the economy during the COVID 19 pandemic, the Chancellor of the Exchequer introduced a Stamp Duty Holiday. This effectively suspended or reduced (depending on the value of the house purchase) Stamp Duty on house purchases. The holiday began on July 8th 2020, and is due to end on September 30th 2021.
What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is the tax you have to pay if you buy a residential property or a piece of land in England or Northern Ireland above a certain price.
This is how the Stamp Duty holiday has worked –
- Until June 30th 2021, there was no Stamp Duty to pay on homes purchased for less than £500,000
- From July 1st 2021 to September 30th 2021, the nil rate band applied to all purchases below £250,000
- From October 1st 2021, the nil rate band returns to its original position – applying to all purchases below £125,000 in value.
If you buy more than one property, the surcharge of 3% on top of the current rate has applied throughout the holiday period.
There’s extra relief for first-time buyers. They will pay no Stamp Duty on properties costing up to £300,000 and a discounted rate on property purchases up to £500,000.
Please note – If you’re buying a property in Scotland, you will pay Land and Buildings Transaction Tax (LBTT) and in Wales Land Transaction Tax (LTT) instead of Stamp Duty.
This table explains the Stamp Duty rates from October 1st 2021
| Properties priced between £0 and £125,000 | 0% |
| Properties priced between £125,001 and 250,000 | 2% |
| Properties priced between £250,001 and £925,000 | 5% |
| Properties priced between £925,001 and £1,500,000 | 10% |
| Properties priced at over £1,500,000 | 12% |
Stamp Duty relief for first-time buyers from October 1st 2021
Who is classed as a first-time buyer? A person is classed as a first-time buyer if they’re buying their only or main residence and have never owned a freehold or have a leasehold interest in a residential property in the UK or abroad.
From October 1st 2021, first-time buyers will pay no Stamp Duty on properties bought for less than £300,000.
For properties costing up to £500,000, they will pay no Stamp Duty on the first £300,000. Then Stamp Duty will be payable at 5% on the remaining amount, up to £200,000.
If the property you’re buying is worth over £500,000, then the normal rates will apply, and first-time buyer relief won’t apply.
Helping with Personal Tax Advice
Here at AccountsCo, we understand property taxes. We’ll support you with guidance covering stamp duty capital gains and other relevant aspects.
Find out more. Get in touch, and remember – we’re here to help.
As part of the measures to support the economy during t […]