Stamp Duty changes as countdown begins for house hunters

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Time is running out for prospective house buyers to complete their purchase before changes in Stamp Duty come into effect.

Stamp Duty changes are set to come into force at the end of this month.

It will bring an end to the government’s extension of the Stamp Duty holiday, which placed a temporary pause on property tax during the coronavirus pandemic.

The scheme was originally scheduled to come to an end in March, but the stamp duty holiday was extended by a further three months.

Currently, tax is suspended on the first £500,000 of all property sales in England, a measure which was introduced in July 2020.

The move was aimed at helping buyers who might have taken a financial hit because of Covid and boosting a property market rocked by lockdown.

That suspension is now due to run out on June 30 with home buyers being warned the scheme is set to come to an end.

Once stamp duty returns it will mean a number of changes for those wanting to get onto the property ladder or buy a new home.

Thousands have signed an online petition for stamp duty to apply when contracts are exchanged, rather than at the point of completion.

More than 12,600 people have signed the petition on the government website .

But what is stamp duty and who does it affect?

Scroll down below for Stamp Duty key questions answered.

When you have to pay for stamp duty

Stamp Duty, also known as Stamp Duty Land Tax, must be paid if you buy a property or piece of land over a certain price in England and Northern Ireland.

In Scotland it is called Land and Buildings Transaction Tax while in Wales it’s called Land Transaction Tax.

You have to pay the tax in England and Northern Ireland for:

  • buying a freehold property

  • buying a new or existing leasehold

  • buying a property through a shared ownership scheme

  • transferring land or property in exchange for payment, for example you take on a mortgage or buy a share in a house.

Stamp duty thresholds

The current Stamp Duty threshold for residential properties is £500,000 but this changes on July 1, 2021.

Currently, it means you don’t have to pay stamp duty if your property value is below £500,000.

The threshold for non-residential land and properties is £150,000.

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Changes on June 30

Thresholds will change as the UK begins to come out of lockdown.

The threshold from July 1 to September 30, 2021, will be £250,000 – this means you will not have to pay Stamp Duty on residential properties costing up to £250,000.

Properties worth £250,000 or more will acquire a tax.

For non-residential land and properties Stamp Duty will need to be paid for anything costing £150,000 or more.

From October 1, you will pay Stamp Duty on properties costing more than £125,000 for residential properties and £150,000 for non-residential land and properties.

First time buyer rules are different

First-time buyers will get a discount from stamp duty from July 1, 2021. It means you’ll pay less or no tax if both the following apply:

  • you, and anyone else you’re buying with, are first-time buyers

  • the purchase price is £500,000 or less

You’ll also be eligible for this discount if you bought your first home before July 8, 2020.



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