Move House Before April 2021 & Enjoy A Stamp Duty Holiday
As a result of the 2020 pandemic, many initiatives have been brought in to help improve the economy, with one of these being the stamp duty holiday.
What Is Stamp Duty?
Essentially, stamp duty is a tax (SDLT) that applies to everyone who purchases land or property within England or Northern Ireland, this includes buying freehold properties, a new or existing leasehold, buying through a shared ownership scheme and transferred land or property in exchange for payment.
Generally, when you buy a property, you will be required to pay stamp duty on any properties over £125,000 for those who’ve previously owned a property. However, the stamp duty holiday was brought in to last until 31st March 2021 to help support the property market and the economy accordingly. Typically, in normal circumstances, you will be required to pay a 2% charge on the part of property between £125,000 and £250,000. As well as organising your home removals upon completing on your house, if you’re required to pay stamp duty, this will need to be paid within 2 weeks of the completion of your house via your solicitor.
If you’re a first-time buyer you might be wondering do I have to pay stamp duty? Well, the answer is yes! However, only on properties over £300,000, which in comparison to home movers who are normally required to pay stamp duty from anything above £125,000, this threshold is a great advantage for first-time buyers who can purchase a property above £125,000. So, does this mean I can benefit from the stamp duty holiday, you may ask? With the average first-time buyer paying around £208,000 for the first property, it is unlikely that as a first-time buyer you will benefit from the stamp duty holiday unless your home is valued at £500,000.
Due to the difference in legislations around property taxes across the UK, it’s important to bear in mind that rates may vary on the stamp duty holiday. For example, when moving within England and Northern Ireland, you will only be required to pay stamp duty on homes over £500,000. However, in Wales and Scotland, you will need to pay 5% stamp duty on homes over £250,000. Although, these all share the end date of 31st March 2021, so get in quick if you want to benefit from the stamp duty holiday!
What Is the Stamp Duty Holiday?
The stamp duty holiday was introduced in the summer to encourage people to move house, saving home buyers money as a result if the property that they wish to purchase is less than £500,000. With many people saving an average of £4,500 it’s no surprise that 90% of transactions are no longer required to pay stamp duty.
Calls For Extension To The Stamp Duty Holiday
This is not the first time that there has been a stamp duty holiday to help improve the economy. Back in 2008, there was another stamp duty holiday for a whole year on properties worth up to £175,000 which was brought in to lift the market following the financial crisis. However, due to the pandemic, and the stamp duty holiday this has seen a huge increase in property sales meaning that resources are strained across solicitors, estate agents, lenders, etc to carry out the formalities, resulting in calls for the stamp duty holiday to be extended.
If you’d like more information on the stamp duty holiday, we’d recommend getting in contact with a conveyancing solicitor who will be able to explain how this relates to your personal circumstances and whether or not you will be required to pay this on your new home.
However, if you’re looking for a Plymouth removal company to carry out your home removals, Hackworthy & Sons can help.
Get in touch with us today for your home removal quote.