The stamp duty holiday ended on 30 September meaning that stamp duty tax relief is reduced from £250,000 to £125,000. Here’s a guide to what you’ll have to pay.
The second phase of the stamp duty holiday ended on 30 September. Stamp duty land tax relief has now reverted back to pre-pandemic levels of £125,000, down from £250,000. So what does this mean for you if you’re thinking of moving house?
Let’s recap first. If you were fortunate enough to complete on a property purchase by 30 June 2021, you would have paid no stamp duty on the first £500,000 of its value. If you completed on a property by 30 September, you would have paid no stamp duty on the first £250,000.
From 1 October 2021, stamp duty tax relief has reverted back to its pre-pandemic level of £125,000. In other words, you’ll pay no stamp duty on the first £125,000 of a property’s value, but upwards of that figure, there will be stamp duty to pay.
However, if you are a first-time buyer and the property you are purchasing is under £300,000, there is no stamp duty to pay. If you are buying with someone else, you must both be first-time buyers in order to benefit from the saving.
What will you have to pay?
Here is a quick guide to stamp duty payments on residential purchases:
|Stamp duty to pay
|Up to 125,000 of a property’s value
|Portion between £125,001 and £250,000
|£250,001 and £925,000
|£925,001 and £1.5 million
|Over £1.5 million
The stamp duty holiday was introduced by Chancellor Rishi Sunak on 8 July 2020 in a bid to boost the property market after it came to a halt during the first lockdown. It was a strategy that worked well, as the property market has been booming over the last year. The combination of the stamp duty saving and people re-evaluating their property needs during lockdowns has resulted in more buyers than available properties.
If you’re thinking of moving and you’re unsure about what stamp duty you’ll have to pay, you can use the government’s stamp duty calculator.
House prices have continued to rise, but the market has eased up a bit after the frantic level of activity in the summer when buyers were aiming to beat the first stamp duty deadline before the end of June.
Property market predictions
It’s always hard to make a blanket prediction about the market, but people are still keen to move. A home office and a bigger garden are popular requirements for many buyers who have seen their circumstances change during the pandemic. More space is key for many.
There is still a lack of available properties for sale, and this will help to keep prices up as buyers are competing for homes.
However, the furlough scheme ended on 30 September and 11.6 million jobs were supported by the scheme according to the government. Whether people want to continue to move will largely depend on how secure they feel in their job situation. Almost one in four people fear losing their job according to a survey of 1000 employees by finance firm NerdWallet.
However, if you feel secure about your employment, now could be a good time to move or buy your first home as borrowing is still cheap. Interest rates on mortgages are very competitive and for those with larger deposits, there are incredibly cheap mortgage deals with rates under one per cent.
We’re here to help with advice on your mortgage. Feel free to contact us.