Tax & Estate Planning

The end of the Stamp Duty Holiday

By June 24, 2021 No Comments

You will recall Chancellor Rishi Sunak Introduced in July 2020, the Stamp Duty Land Tax (SDLT) Holiday that significantly reduce the costs of buying a home and has been supporting the housing market since, and has contributed to the record rise in house prices.

However, the higher SDLT thresholds will change from 1 July increasing the cost of buying a home.

From the beginning of July, the SDLT rules will change so that the threshold at which tax is paid falls from £500,000 to £250,000 (£300,000 for first time buyers, and 5% on the next £500,000).

This new rate of SDLT will remain in place until 1 October 2021, when it will fall again to just £125,000.

The new rates will be as follows:

Property or lease premium or transfer value from 1 July SDLT rate
Up to £250,000 0 per cent
The next £675,000 (the portion from £250,001 to £925,000) 5 per cent
The next £575,000 (the portion from £925,001 to £1.5 million) 10 per cent
The remaining amount (the portion above £1.5 million) 12 per cent
 

Property or lease premium or transfer value from 1 October

SDLT rate
Up to £125,000 0 per cent
The next £125,000 (the portion from £125,001 to £250,000) 2 per cent
The next £675,000 (the portion from £250,001 to £925,000) 5 per cent
The next £575,000 (the portion from £925,001 to £1.5 million) 10 per cent
The remaining amount (the portion above £1.5 million) 12 per cent

Remember, there is a 3% additional home surcharge on second homes purchased.

It will be interesting to see if this dampens demand and will see house prices level or even fall into 2021.