The main stamp duty holiday may have ended but there is still time to save money by moving house before October this year (2021).
Up until June 30, buyers in England and Northern Ireland didn’t have to pay stamp duty on the first £500,000 of any property intended to be their primary residence. As the average house price in the UK is estimated at £256,400, this meant the majority of buyers didn’t have to pay anything at all.
The weeks leading up to the end of the stamp duty holiday led to a frenzy of people trying to complete their sales and move house before the deadline with removals firms like Andrew Porter Ltd receiving high levels of bookings. But if you didn’t manage to move before the end of June, all is not lost – buyers will still pay lower levels of stamp duty than normal until the end of September.
What are the current rules?
Stamp duty will not have to be paid on the first £250,000 of a property in England and Northern Ireland so long as it will be used as your main residence. This means that stamp duty will still be payable if you are buying a holiday home or second property.
If you are buying a property for more than £250,000, you will pay stamp duty at a rate of five per cent between £250,001 and £925,000. Stamp duty is then 10 per cent between £925,001 and £1.5 million and 12 per cent for properties bought for more than £1.5 million.
Stamp duty is only payable on the amount over the threshold so if you buy a home for £255,000, you will only pay the tax on £5,000 of the purchase price – the equivalent of £250.
If you are a first-time buyer, you will not pay stamp duty on properties up to £300,000. For people buying more expensive homes, stamp duty will be charged at five per cent for the amount over £300,000 up to £500,000.
This stamp duty relief is only available if your first home is worth less than £500,000 in total. If you are paying more than £500,000 you will be expected to pay stamp duty at the standard rate.
What will happen from October 1?
From October 1, stamp duty rates will return to their standard levels. Anyone wanting to benefit from the current stamp duty relief must complete their purchase by September 30.
This means that someone who exchanges contracts before September 30 but does not complete until after the deadline will have to pay stamp duty at the standard rate.
From October 1, no stamp duty will be payable for the first £125,000 of a property that will be used as a primary residence. Between £125,001 and £250,000, stamp duty will be two per cent, while the rate will be five per cent from £250,001 and £925,000.
For high-value properties, stamp duty will be 10 per cent between £925,001 and £1.5 million and for amounts above £1.5 million, it will be 12 per cent.
Someone buying a home for £255,000 in October would pay £2,750 - £2,500 more than if they had completed their purchase a month earlier. This means many will be keen to complete purchases by the end of September to avoid paying thousands of pounds more in tax.
If you’re planning to move house in the next few months, call our team at Andrew Porter for a quote or removal survey on 0800 389 1222.