Good news for homebuyers! Those looking to buy a new home or get onto the property ladder will be pleased to hear the latest announcements regarding stamp duty and 5% mortgage schemes.
SDLT thresholds extended
Last March, in order to stimulate the housing market the Chancellor announced a temporary cut in Stamp Duty Land Tax for home buyers across England and Northern Ireland which was scheduled to last until 31 March 2021. The current threshold is £500,000 for residential properties, and £150,000 for non-residential land and properties.
This has now been further extended until 30 June 2021 so that transactions in progress will continue to benefit from the reduced rates.
Staggered reductions to the Stamp Duty Land Tax Nil Rate Band
As a transitional measure from 1 July 2021 the Nil Rate Band of Residential SDLT in England and Northern Ireland will then decrease to £250,000 for 3 months until 1 October 2021 when it will revert to £125,000 for purchases completed on or after that date.
There has been no change to the SDLT rates above the Nil Rate Band. The 3% supplementary charge for second and subsequent homes in England and Northern Ireland will continue to apply.
Note that there are different rates of tax on property transactions in Scotland and Wales as such taxes have been devolved in those countries.
5% mortgage schemes extended
Another measure announced to stimulate the housing sector is a new 95% mortgage scheme guaranteed by the government that will mean that people buying a house will only need a 5% deposit where the purchase price is no more than £600,000.
If you’d like to discuss your existing property investments and get some independent, impartial advice, please don’t hesitate to get in touch.