So the ‘stamp duty holiday’ in its current form for properties up to £500,000 has now officially ended as of yesterday. Rishis Sunak launched the temporary Stamp Duty Land Tax (SDLT) in July 2020 to boost the housing market following the first national lockdown. The aim was to save buyers from paying stamp duty on any properties valued at up to £500,000, which in some cases has equated to savings of up to £15,000.
UK mortgage approvals surged by 827% year on year in May as house prices recorded their highest growth rate since 2014.
A combination of the SDLT tax break with pent up demand and a knockdown-inspired desire for more (particularly outdoor) space means that the property market has been at its busiest for almost a decades.
However it is not now strictly the end of the stamp duty holiday, there is still substantial tapering from July where £2,500 can now be saved on the value of a purchase over £250,000.the nil rate band, then settles back to £125,000 from October 1st 2021.
It is also predicted that the end of the stamp duty is likely to see a leveling off in this frantic demand and a return to normal timescales to complete transactions, although our view is that if transactions can go through quickly during stamp duty then this pace should continue after this deadline is over.
The Chancellor’s initiative last year certainly stimulated the wavering housing market which was exactly the effect intended to further fuel in rising demand, however the demand in some cases outpaced supply which led to above inflation house price increases. – in some cases the increases have eaten into and entirely consumed the tax saving that was intended.
The current stamp duty rates are as follows
£0 – £250,000 = 0%
£250,001 – £925,000 = 5%
£925,001 – £1,500,000 =10%
From 1 October 2021, rates are due to return to normal. That means the point you start paying stamp duty will revert back to £125,001
£0-£125,000 = 0%
£125,001 – £250,000 = 2%
£250,001 – £925,000 = 5%
£925,000 – £1,500,000 = 10%
You can use the government Stamp Duty Land Tax (SDLT) calculator to find out how much you would pay from July 1st.
SDLT must be paid within 14 days after the effective date of the transaction. If you pay the tax late, you pay interest from the day you should have paid until the day you pay it.
David Phillip Commented “the stamp duty holiday certainly generated much interest at a time when the Property market needed a boost, however the end of the holiday can be viewed as positive, signalling a return to post-pandemic normality.
If you are looking to sell your property and would like a free market appraisal or a further discussion regarding the property market please call David Phillip Estate Agents on 01134 676 400 w davidphillip.co.uk a: 86, Leeds Road, Harrogate, Leeds