Stamp duty changes explained: How much could you still save?

Budget: Sunak announces stamp duty nil rate extension in March

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Stamp Duty – also known as Stamp Duty Land Tax – is a necessary evil when purchasing a home, and is a tax on property or land bought in England and Northern Ireland. Homeowners are required to pay if their purchase costs over a certain amount, however, the threshold was extended by Chancellor Rishi Sunak last year to give a boost to the property market.

This so-called Stamp Duty holiday came to an end on June 30, however, Mr Sunak has provided a further extension with a reduced threshold of £250,000 until 30 September.

Moving house can be confusing at the best of times, with a plethora of forms to fill in – however Stamp Duty doesn’t need to be confusing.

With many house hunters unsure of how the new rules apply and how much they could be saving, Jess Mitchell, office manager at Nottinghamshire estate agent Gascoines, tells everything you need to know.

Ms Mitchell said: “Following the latest government announcement to stamp duty, we’ve seen an influx of homeowners look to evaluate their properties but many are unsure how the new changes affect them and whether they can complete transactions in time.

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“If you purchase a property that is £250,000 or below between July 1 and September 30 then you are relieved of stamp duty until October 1 – where you will then pay two percent of the property value.

“Properties above £250,000 and £925,000 are five percent and 10 percent, respectively.

“It’s also important to note that properties with additional dwellings, such as second homes or buy-to-let, have a three percent higher rate applied on top of the standard rates.”

From July 1 onwards, first-time buyers will pay zero percent stamp duty on properties which are under £300,000.

This increases to five percent if the property is between £300,000 and £500,000, and anything over will not benefit from any relief and standard rates will apply.

Ms Mitchell added: “It’s fantastic to see more help is being provided to first-time buyers.

“Getting on the property ladder can be so difficult and we hope this boost from the government will see more house hunters coming through the door.”

So what does the property expert have to say for those looking to take the step and buy their first home?

Ms Mitchell said: “My advice would be to always aim for higher than your deposit and if possible, have this ready – along with a mortgage in principle – before you start looking for a house and seek advice from your local estate agents or mortgage advisors.”

Prospective buyers can calculate the stamp duty which may be payable by using a SDLT calculator to input the purchase price. have a Stamp Duty calculator which you can use via this link here. 

The calculator will work out how much Stamp Duty you’ll need to pay, whether you’re a first-time buyer, just moving to a new home having bought a house before, or if you’re buying an additional property.

All you need is the property price and an idea of when your house sale might complete.

However take caution, as this is just a guide, and a solicitor or tax consultant should advise the costs which must be paid on completion.

Rates for non-UK residents purchasing a residential property in England and Northern Ireland differ and the new rates will be two percent higher than those made by UK residents, and these apply to both freehold and leasehold properties.

From July 1 to September 30, 2021, the Stamp Duty rates are as follows (Property or lease premium or transfer value/SDLT rate):

  • Up to £250,000 – zero percent
  • The next £675,000 (the portion from £250,001 to £925,000) – Five percent
  • The next £575,000 (the portion from £925,001 to £1.5 million) – 10 percent
  • The remaining amount (the portion above £1.5 million) – 12 percent

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