Stamp duty holiday extended

The Chancellor, Rishi Sunak, presented the details of his spring Budget in Parliament today, outlining the government’s taxes and expenditure plans for the coming year.

Two major policies are particularly relevant to homebuyers and sellers. Here is Firco’s take on what you should know.

The stamp duty holiday has been extended for another three months, until June 30th. If you complete before 30 June 2021, you will pay no stamp duty on a property worth up to £500,000 that you will use as your primary residence. Stamp duty will apply to residences above this value, and second-home buyers and buy-to-let landlords will also have to pay the 3 percent + tax surcharge.

From 1 July to 30 September, there’ll be no stamp duty on properties worth up to £250,000.

Previous stamp duty rates will be restored on October 1. This means that the tax will be levied on all homes worth more than £125,000. However, first-time buyers will continue to receive a tax break and will only be required to pay the tax on homes worth more than £300,000.

Is this a wonderful thing?
The average time it takes to purchase a home has increased by many weeks as a result of Covid and the increased demand for surveyors and conveyancers as a result of the tax holiday. This deadline extension should give existing homebuyers more confidence that they’ll make it and avoid an unforeseen tax bill (though it’s still not a guarantee).

What about buyers who haven’t started yet?
Only three months have been added to the Christmas deadline. The tax will apply to properties worth more than £250,000 from July 1 to September 30. While buying a home from start to finish could be possible in that time frame, it is not guaranteed.

If you want to buy before stamp duty returns in full, consider your budget carefully. Would you be able to afford it if you missed the new stamp duty holiday deadline and had to pay the full amount of tax? There’s probably no reason not to go ahead if you’re willing to set aside the extra money just in case. Otherwise, you can either wait or revise your house budget to account for the likelihood of missing the deadline.

We’re here to help
We are responsible for advising you on the most suitable mortgage for your circumstances. Whether you’re moving up the ladder, looking to downsize, purchasing another property or remortgaging, please get in touch; we have our finger on the pulse in this evolving environment and can assist you to navigate any challenges. We are qualified advisers with in-depth knowledge of the market and are able to look at a whole range of mortgage products. Getting a mortgage is one of the biggest financial decisions you will make, so it’s important to get it right.

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No matter what this year has in store, check in with us regularly to ensure you’re on the best products for your needs – lenders continue to offer attractive deals, we can find the most suitable one for you.

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The above article is purely for information purposes and does not constitute advice.

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