Under the previous holiday scheme, stamp duty was put on hold on properties worth up to £500,000 in England and Northern Ireland. So, if you’re wondering what happens after the end of June, here is the plan for the upcoming months.
Here, we will look at what rates to expect generally, and what this also means if you are a first-time buyer or buying an additional property.
Reduced Rates
From the 1st of July until 30th September 2021, there will be reduced rates for stamp duty if you’re buying a new property. This means that there are still savings to be made.
From July in England and Northern Ireland, no stamp duty will be paid on the first £250,000 of the property’s value, unless it is a second home. This reduced rate will be returning to £125,000 on 1st October 2021.
What happens if you’re buying a second property?
If you are buying a second property, or if you may temporarily end up owning two properties, then you pay the normal stamp duty rate plus an additional surcharge of 3% up to £500,000. This rises to 8%, 13% and 15% at higher bands in England and Northern Ireland. This will however shift to 3% up to £250,000 in July, before returning to 3% up to £125,000 on the 1st of October.
What happens if you’re a First Time Buyer?
Since 2017, first time buyers pay no stamp duty on a residential property up to a value of £300,000 or less. When the stamp duty holiday was introduced in 2020, it allowed no stamp duty on property’s up to £500,000, not just for first-time buyers. This meant the first-time buyer exemption had no practical effect.
However, after the 30th of June, first-time buyers will continue to pay 0% on the first £300,000 and 5% on the remainder up to the value of £500,000. It is worth knowing however that there is no first-time buyer relief on properties above £500,000.
In order to qualify as a first-time buyer, you must never have owned or had an interest in a residential property in the UK or overseas.
What will now happen to the housing market?
Many experts predict that the market will start to slow as the rush to meet the June deadline ends and stamp duty rates restart (beginning at the reduced rate). However, with low mortgage rates, the return of higher loan-to-value mortgage products and the government support with the mortgage guarantee scheme, some are predicting that the market will remain buoyant for at least the next six months.
Is now a good time to move?
There is still time to benefit from the reduced rates being introduced in July. If you’re a first-time buyer, you will be exempt from the new rates and continue to pay 0% stamp duty.
There are currently no further stamp duty savings anticipated after the 1st October 2021, but of course the government can always make further changes.
To find out more, please don’t hesitate to get in touch.
