There has been a welcome relief for house buyers this month as it was confirmed there will be a further three-month extension to the stamp duty holiday on house purchases, as announced by Chancellor Rishi Sunak in his budget.
The property purchase tax has been suspended on the first £500,000 of all sales in England and Northern Ireland since July 2020 – read our previous article on the Stamp Duty Holiday here. – and the extension means that the tax break will now continue until the end of June.
After that the nil rate band will be set at £250,000 – double its standard level – until the end of September.
Rishi Sunak told MPs the extra move was “to smooth the transition back to normal – and we will only return to the usual level of £125,000 from October 1”.
What is Stamp Duty?
You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England and Northern Ireland.
The tax is different if the property or land is in:
Scotland – pay Land and Buildings Transaction Tax
Wales – pay Land Transaction Tax if the sale was completed on or after 1 April 2018
You pay the tax when you:
buy a freehold property
buy a new or existing leasehold
buy a property through a shared ownership scheme
are transferred land or property in exchange for payment, for example, you take on a mortgage or buy a share in a house
Current threshold as part of the Stamp Duty Holiday
The threshold is where SDLT starts to apply. If you buy a property for less than the threshold, there’s no SDLT to pay.
The current SDLT threshold for residential properties is £500,000.
The threshold for non-residential land and properties is £150,000.
The tax break was due to end on 31 March, but it will now end on 30 June.
After this date, the starting rate of stamp duty will be £250,000 until the end of September. Stamp duty will then return to the usual threshold, and will be paid on property sold for more than £125,000.
The extension means anyone completing a purchase on a main residence costing up to £500,000 before 30 June will not pay any stamp duty. More expensive properties would only be taxed on their value above that amount.
As detailed on the Government website, from 1 April 2021, you’ll get a discount (relief) that means you’ll pay less or no tax if both the following apply:
you, and anyone else you’re buying with, are first-time buyers
the purchase price is £500,000 or less
You’ll also be eligible for this discount if you bought your first home before 8 July 2020.
How do you calculate how much you pay?
How much you pay depends on whether the land or property is:
residential and whether you’re a first-time buyer
non-residential or mixed-use
You can use HM Revenue and Customs’ (HMRC) Stamp Duty Land Tax calculator to work out how much tax you’ll pay.
Residential Conveyancing Solicitors
At Rose & Rose we understand that buying or selling a property is a very stressful time for all of us. We can eliminate that stress by offering a highly personalised residential conveyancing service.
Property often needs specialist skill, professional expertise and knowledge which can only be provided by an appropriately qualified solicitor acting on your behalf.
If you would like to speak to us regarding the stamp duty holiday extension or any other questions concerning residential property purchases please contact us on
Please note that this article is meant as general guidance and not intended as legal or professional advice. Updates to the law may have changed since this article was published
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