2021 budget: Extension of stamp duty leave in England and Northern Ireland

The stamp tax you pay depends on the property price and the time of purchase

Stamp duty is a flat rate tax payable by anyone buying property or land that costs more than a set amount. The price you pay depends on the price and the type of property. Here’s how prices change when you buy property for your primary residence in England and Northern Ireland:

  • For purchases completed by June 30th, the current stamp duty leave will remain in effect. So you pay:
    – Nothing for properties purchased for up to £ 500,000
    – 5% on the portion between £ 500,001 and £ 925,000
    – 10% on the portion between £ 925,001 and £ 1,500,000
    – 12% on the part that costs more than £ 1,500,001
  • There is some relief for purchases made between July 1st and September 30th. So you pay:
    – Nothing for properties purchased for up to £ 250,000
    – 5% on the portion between £ 250,001 and £ 925,000
    – 10% on the portion between £ 925,001 and £ 1,500,000
    – 12% on the part that costs more than £ 1,500,001
  • Stamp tax is back to normal for purchases made after October 1st. So you pay:
    – Nothing for properties purchased for up to £ 125,000
    – 2% on the portion between £ 125,001 and £ 250,000
    – 5% on the portion between £ 250,001 and £ 925,000
    – 10% on the portion between £ 925,001 and £ 1,500,000
    – 12% on the part that costs more than £ 1,500,001

It’s worth noting that for properties costing more than £ 500,000, stamp duty leave didn’t change the bands above £ 500,000, but you still save £ 15,000 on the first £ 500,000. So, for example, if you buy £ 600,000 worth of property while the vacation is in progress, you will only pay £ 5,000 stamp duty (5% of £ 100,000 above threshold) instead of the usual £ 20,000.

While the stamp duty vacation has spiked home purchases during the pandemic, it has also driven house prices higher – average prices were up 6.9% year over year, according to Nationwide this week. While you may pay less stamp duty when buying a home, this can be partially offset by the price of the home itself.

The rules for first-time buyers are usually different

If this is your first time shopping in England or Northern Ireland, stamp duty rules usually apply differently. However, like other buyers, you will not pay stamp duty on the first £ 500,000 purchase price of the property until June 30, 2021.

Starting July 1, 2021, the normal rules for first-time buyers will return – you won’t have to pay stamp duty on the first £ 300,000 of a purchase.

It’s also worth noting that if you already own a home and are buying an additional property worth more than £ 40,000, there will be a 3% levy – both current and end of stamp duty.

The home purchase tax works differently in Scotland and Wales

There are different systems in Scotland and Wales: you pay land and building transaction tax in Scotland and land transaction tax in Wales.

Today’s announcement will not affect those buying property in Scotland and Wales. There are currently separate tax breaks in both countries. Until March 31, 2021, buyers will not pay tax on the first £ 250,000 of a purchase (typically the threshold is £ 145,000 in Scotland and £ 180,000 in Wales. We are checking with the local administrations to see if the deadline is extended to March 31, 2021 are planned and will update this story as soon as we hear about it.

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