Buyers still stand to benefit from Stamp Duty holiday
The property market experienced a surge of activity in May and June this year, with buyers rushing to get their transactions completed before the extended Stamp Duty holiday deadline of 30 June 2021. The nil-rate Stamp Duty threshold was first increased to £500,000 on 8 July 2020, meaning that buyers have been able to benefit from a maximum tax saving of up to £15,000 for nearly a year.
However, the huge demand caused by the tax break led to significant delays as those involved in the property transaction process, including mortgage providers, conveyancers and surveyors, were overwhelmed. While an extension to the original March 2021 deadline will have helped thousands more buyers to maximise their tax savings, it is inevitable that others will have lost out.
Don’t forget, though, that there is still a chance to make savings!
What is the Stamp Duty holiday?
From 8 July 2020 through to 30 June 2021 inclusive, the threshold at which buyers began to pay Stamp Duty on their purchase increased from £125,000 to £500,000 in England and Northern Ireland. The change means that nearly 90% of buyers who completed their transaction during this period paid no Stamp Duty at all, saving an average of £4,500 – and potentially much more.
Savings still to be made
While it’s understandable that many buyers will be disappointed to have missed the June deadline, the government actually introduced two deadlines when the extension was first announced in the Spring Budget back in March – one at the end of June, and one at the end of September. The three month ‘interim’ period to October 2021 will see buyers benefit from a lower, albeit still higher than normal, nil rate threshold of £250,000. The threshold will return to its regular £125,000 from 1 October.
This means buyers will pay the following rates during this period:
|£0 – £250,000||0%|
|£250,001 – £925,000||5%|
|£925,000 – £1,500,000||10%|
The tapering of the allowance means the maximum savings you can make are much lower – but you could still stand to save up to £2,500. This is with the exception of first-time buyers, whose regular Stamp Duty threshold of £325,000 now outstrips the interim holiday threshold.
How to take advantage
With less than three months left to go, those who have yet to start their property search will likely be hard pushed to make the 31 September deadline. However, those whose transactions are ongoing are most certainly in with a chance.
The best thing you can do now is to speed up the transaction process as much as possible, with the help of industry professionals.
How to speed up the buying process
The number one way you can speed up the process and complete on or before 31 September is to instruct an expert Residential Property solicitor as soon as possible. Our team has years of experience in dealing with conveyancing transactions of all sizes and levels of complexity, meaning that we understand the various issues that can occur along the way and are primed to react to them quickly when they do arise. Where a chain is involved in your purchase, having a good solicitor on your side can mean the difference between completing your transaction successfully and having your chain collapse, with all the disappointment and wasted money that comes along with it.
You’ll also have your part to play! For example, correctly filling in and returning key documentation to your solicitor as soon as possible will allow them to get on with the next stages of your transaction without delay.
Don’t delay – get in touch
To get in touch, and be one step closer on your way to Stamp Duty savings, contact our Partner Sheri-Anne Mizon, who has over two decades’ experience in complex property cases. Call her on 0203 871 0007 or email her at firstname.lastname@example.org.