The Chancellor has extended the stamp duty holiday on the first £500,000 of all property sales in England and Northern Ireland as part of the 2021 Budget.

The threshold at which the tax is charged has been raised to £500,000 and is available until 30 June 2021 (extended from the previous deadline of 31 March 2021). This will then be reduced to the first £250,000 of a purchase until the end of September, and will return to the pre-pandemic level of £125,000 from October 2021.

The initiative is designed to help house buyers who may be struggling because of the ongoing Coronavirus crisis and to help boost the property market. In Autumn 2020 it was suggested that many property buyers may be missing out on the stamp duty relief due to a “large backlog” and “severe delays” in house sales. This extension will be welcome news for many home buyers.

What is Stamp Duty?

Stamp Duty Land Tax is a tax payable by an individual or a business in a transaction involving land. A certain percentage of the purchase is paid to Inland Revenue based on the value of the property – the greater the value of the property, the greater the SDLT paid.

Stamp duty land tax can be paid on both residential and non-residential properties and applies on purchases over £125,000. First-time buyers however pay no tax up to £300,000 and 5% on any portion between £300,000 and £500,000.

For people who have bought a home before, rates are 2% on £125,001-£250,000, 5% on £250,001-£925,000, 10% on £925,001-£1.5m, and 12% on any value above £1.5m.
Additional properties, including buy-to-lets and second homes, also have to pay an additional 3% of the purchase price in stamp duty.

What happens now?

Any property purchases below the new level will not need to pay stamp duty as long as the purchase is completed before the deadline (30 June 2021). Those buying second homes and buy-to-let properties will also benefit, but will still have to pay the 3% extra duty due on the entire price.

The average stamp duty bill should fall by £4,500, and around nine out of 10 people buying a home before the deadline will pay no stamp duty at all.

How can we help?

Our Residential Property and Conveyancing team can provide house-buyers with sound advice in the area of stamp duty land tax planning.

We have developed a market-leading and reputable conveyancing service right across Northern Ireland. We are here to guide you through, what can often seem like a daunting process, sharing our knowledge and expertise, dealing with your transaction in the most efficient way possible, keeping you regularly updated and availing of all the latest technology in conducting your transaction.