What homebuyers need to know about Stamp Duty Land Tax which started in July 2020, and is now being tapered down.
The tapering down of the temporary Stamp Duty Land Tax (SDLT) that was introduced on 8 July 2020 in response to the pandemic and subsequently extended in the spring Budget has begun. The temporary extension of the nil rate band to £500,000 ended on 30 June 2021. This saw many homebuyers unable to complete their transactions on time with solicitors struggling to cope with the increased demand.
From 1 July 2021 until 30 September 2021, the nil rate band will be £250,000. The nil rate band will return to the standard amount of £125,000 from 1 October 2021. This applies to England and Northern Ireland only.
No SDLT is payable for first-time homebuyers making a purchase of up to £300,000. The first-time buyer’s rate was superseded by the temporary SDLT holiday until 30 June 2021.
SPECIAL RULES AND RATES FOR FIRST-TIME HOMEBUYERS
However, from 1 July 2021, the special rules and rates for first-time buyers apply. The first-time buyer’s relief also applies to the first £300,000 for purchases up to £500,000. This has the effect of increasing the nil-rate threshold to £300,000 for first-time buyers of properties costing up to £500,000. There is no relief available for first-time buyers spending more than £500,000 on a property. There are requirements that must be met to qualify for the relief.
