As predicted by property experts, Chancellor Rishi Sunak announced in his budget on 3 March that the current stamp duty holiday is to be extended for a further three months.
Money Saving Expert reports that the property tax has been suspended on the first £500,000 of all sales in England and Northern Ireland since last July and was due to come to an end on 31 March, but it will now continue until, the end of June.
After that the nil rate band will be set at £250,000 – double its standard level – until the end of September.
The chancellor told MPs the extra move was “to smooth the transition back to normal – and we will only return to the usual level of £125,000 from 1 October.”
The tax break was introduced to help buyers who may have taken a financial hit due to the pandemic, and also to help give the property market a boost after the first lockdown. Property buyers in Scotland and Wales have had assistance from equivalent tax relief from their devolved governments, which is due to come to an end on 31 March.
What is stamp duty?
Stamp Duty Land Tax is a tax paid on the purchase of property or land in England and Northern Ireland.
In July 2020, the government temporarily increased the amount at which the tax is paid to £500,000, for property sales.
After the end of June, the starting rate of stamp duty will be £250,000 until the end of September. Stamp duty will then return to the usual threshold and will be paid on property sold for more than £125,000.
The extension means anyone completing a purchase on a main residence costing up to £500,000 before 30 June will not pay any stamp duty. More expensive properties would only be taxed on their value above that amount.
If you want to take advantage of the tax break, and looking to sell your property fast, talk to us today.