Back in July 2020, Chancellor Rishi Sunak announced a temporary Stamp Duty Land Tax (SDLT) holiday in England and Northern Ireland to boost the property market after it was hit by a national lockdown. The stamp duty was reduced to zero in cases where the purchase of a main home was £500,000 or under. A purchase over this amount faced tax on anything over the £500,000 threshold. For example, a £600,000 purchase of a property faced tax on the £100,000 over the threshold. This is because 5% tax is applicable to purchases between £500,001 and £925,000. So, in this instance the buyer will pay £5,000 stamp duty tax, due to paying only 5% of £100,000. Before the SDLT holiday, the purchase of a main residence over £125,000 would have to pay stamp duty, or a first time buyer would have to pay tax on a purchase over £300,000.
The £500,000 threshold for stamp duty was originally only available until 31st March 2021. However, on the 3rd March 2021, Rishi Sunak announced in his Budget that the SDLT holiday will remain in place until the 30th June 2021, allowing a 3 month extension. From July onwards until the end of September, the stamp duty threshold will drop down to £250,000 to avoid such a cliff edge deadline. From 1st October 2021 the SDLT will return to the pre-pandemic threshold of £125,000.
Rishi Sunak also announced plans of a Mortgage Guarantee scheme for homebuyers which is due to start in April 2021. This will allow those who are struggling to save a big deposit, the chance to buy a home. The scheme is set to provide buyers a chance to pay just a 5% deposit on houses worth up to £600,000 turning “generation rent, into generation buy”.
If you would like to discuss any of your property requirements please contact Piers Meadows, Managing Partner of Meadows Ryan Solicitors, on 01932 852 057 or at email@example.com . Further details of this firm’s services can be found at www.meadowsryan.com