Sarah is here to help house buyers and sellers get to grips with the conveyancing process. This month, she outlines the government’s recent extension to the stamp duty holiday…
I understand the temporary stamp duty rules are continuing for another few months. Is this correct?
On July 8 last year, the Chancellor increased the nil rate band for stamp duty to stimulate the property market after the first period of lockdown. It certainly had the desired effect!
The scheme was meant to come to an end on March 31, but after pressure from the industry, Mr Sunak announced at the recent budget that the stamp duty holiday would be extended until June 30 this year. This means that if you purchase a property as your main residence, there is no tax to pay up to the value of £500,000.
Transactions that complete between July 1 and September 30 will benefit from tapering relief, with stamp duty payable on any amount above £250,000. This is still double the standard level of relief, which is normally set at £125,000 and will resume on October 1.
Is the stamp duty holiday only applicable to main residences or are there any other exemptions?
In addition to the tapering relief, from July 1 special rules and rates are being introduced for first time buyers, making them exempt from stamp duty, including properties purchased through shared ownership schemes.
There are also reduced stamp duty rates for properties bought as second homes or investments until June 30. Like main residences, the nil rate band applies up to £500,000, although you still have to pay the additional 3%. Again, this will reduce to £250,000 from July 1 to September 30. As of October 1, the normal rates will apply.
How will my stamp duty payment or exemption be recorded?
A stamp duty return has to be submitted for every property transaction, even if no tax is payable. This will normally be done by your legal adviser and must be with the HMRC no later than 14 days after completion. Fines are issued for late submissions.
The extension to the stamp duty holiday and tapering relief will help homeowners who are stuck in delayed chains and could have faced a large financial penalty through no fault of their own. Hopefully, they will now have sufficient time to complete their purchases before the exemption is lifted.
To find out more about the current stamp duty rules and rates, don’t hesitate to contact me or my conveyancing colleagues on (0114) 218 4000 or email email@example.com