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In addition to other measures aimed at supporting the UK’s housing market, Rishi Sunak has announced that he is to extend the existing Stamp Duty Holiday until the end of June 2021. Stamp duty will then be phased back in again over the following months until 30 September 2021, although some changes will then remain in place.
In a response to the government’s actions in reaction to Covid, the Treasury had introduced a moratorium on stamp duty chargeable on all property up to £500,000. This extension has been extended to allow for a glut in transactions to be cleared, before phasing in stamp duty again later in the year.
Stamp Duty Rates were previously as follows;
Up to £125,000: 0%
On the portion from £125,001 to £250,000: 2%
On the portion from £250,001 to £925,000: 5%
On the portion from £925,000 to £1.5m: 10%
Above £1.5m: 12%
The savings available to those buying properties with a value less than £500,000 are, therefore, significant.
The Holiday Rates are as follows;
Up to £500,000: 0%
On the portion from £500,001 to £925,000: 5%
On the portion from £925,001 to £1.5m: 10%
Above £1.5m: 12%
The tax-free threshold announced in the recent Budget will be cut from £500,000 to £250,000 on housing sales that complete between 1 July until 30 September to allow some phasing back to normal and the threshold for the nil rate band will then fall back to its usual level of £125,000 on 1 October.
First-time buyers will still benefit from existing exemptions and second home buyers are still subject to the 3% slab rate in addition to the above.
A 2% stamp duty levy will also be imposed on non-UK residents who buy property in England and Northern Ireland from April 2021.
Remember, stamp duty becomes payable upon completion, so the holiday rates set out above will likely only benefit those with transactions already underway, although the phasing relief is still significant.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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Mortgage Required Ltd, Finance House, 5 Bath Road, Maidenhead, SL6 4AQ is authorised and regulated by the Financial Conduct Authority reference 573718 at www.fca.org.uk.
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