Chancellor of the Exchequer Rishi Sunak announced on Wednesday 3 March 2021 that the nil-rate band for Stamp Duty Land Tax (“SDLT”) on properties up to £500,000 has been extended until 30 June 2021. After this, the nil-rate band will reduce to £250,000 until 30 September 2021. From 1 October 2021, the nil-rate band is due to return to the usual level of £125,000.
First Time Buyers
Together with most other buyers, First Time Buyers will pay no SDLT on properties up to £500,000 in value until 30 June 2021. Once the nil-rate band reduces to £250,000.00 on 1 July 2021 First Time Buyers will not pay SDLT on properties up to £300,000.00.
You will pay the 3% surcharge on the purchase price on properties up to £500,000.00. From 1 July 2021 to 30 September 2021 you will pay the 3% surcharge on the purchase price on properties between £250,000.00 and £925,000.00. From 1 October 2021 SDLT returns to the usual rates and the 3% surcharge will apply on properties with a purchase price over £125,000.
Buy-to-let and Holiday Homes
These are no different to regular homes.
If a buyer purchasing a buy-to-let property does not own any other property, nor have an interest in property anywhere else in the world they will be treated as a regular buyer and will pay 0% SDLT up to £500,000 until 30 June 2021.
However, should a person already own a home, this will be classed a second property and they will be subject to the 3% SDLT surcharge.
Non UK Residents
From 1 April 2021 new rates of Stamp Duty Land Tax will be applicable to any non UK resident purchasing a property within the UK. The Government announced that the new rates for non UK residents will be 2% higher than the rates applicable to UK residents. This surcharge will apply even during the SDLT holiday and also apply in addition to the second home surcharge of 3%.
What does the SDLT Holiday mean for Buyers and their Conveyancers?
A large number of property buyers have been gearing up for completion prior to the original SDLT Holiday deadline of 31 March 2021. Since the announcement of the SDLT Holiday extension there has been a slight relaxation of the pressure felt by both buyers and their residential Conveyancers however, property transactions are currently taking significantly longer than usual to complete and delays are being caused by many factors including busy mortgage lenders and local authorities, inundated conveyancers, changes in client circumstances, backlogs at the Land and Probate Registries and delays in the Divorce Courts. The current national average transaction time is now approximately 18-20 weeks.
Should you be looking to take advantage of the current SDLT Holiday on purchases up to £500,000.00 you are strongly recommended to commence the purchase process as soon as possible to give yourselves the best opportunity of completion prior to 30 June 2021.
Should purchases not be completed prior to 30 June 2021 comfort can be taken in that the SDLT nil-rate band will reduce to £250,000.00 until 30 September 2021 enabling a number of transactions to proceed whilst paying a reduced amount of SDLT.
Speak to our experts
For further advice please contact Caroline Crutcher who is part of the residential conveyancing team at our office in Parkstone. Email her on email@example.com or contact the Parsktone team on 01202 715815.