Chancellor Rishi Sunak has extended the stamp duty holiday until the end of June 2021 – and ruled it will then be tapered until the end of September.
This now means that homebuyers whose moves have been slowed down by the latest lockdown could save significant amounts of money – up to £15,000. And from June 30th until September 30th 2021, tapering will mean no stamp duty will be charged on a residential property bought for up to £250,000.
It was feared many homebuyers would otherwise be caught in the completion trap if the holiday was not extended beyond the June 30th deadline – potentially giving rise to thousands of sales falling through. The extended stamp duty holiday means that no tax will be levied on the first £500,000 of property purchases in England and Northern Ireland until June 30th.
If you want to take advantage of this stamp duty holiday, you may think you have plenty of time to sell your property before the 2021 deadline. But when you factor in the average time it takes to complete on a property once an offer is accepted, the June deadline doesn’t seem too far away…
Selling a property is a complicated process, with several stages and multiple people involved to get through the whole process to completion.
According to our research and years of experience, receiving an offer once the property is on the market can take around ten weeks, your buyer arranging a solicitor can take well over a month and arranging their mortgage can take up to six weeks, and that’s just a few of the tasks the buyer has to tick off. The solicitors, surveyors and estate agent will also all have their own tasks to complete before the job is done. When all combined, the average time it takes to sell a property from going on the market to completion is six months.
With this in mind, we recommend giving yourself as much time to sell your property as you can, so that you have the best possible chance to take advantage of the stamp duty holiday.
If you would like any help to maximise your chances of completing a sale ahead of June 30th please get in contact with James and we will do all we can to guide you through the process.
Yes, the stamp duty holiday applies to the first £500,000 of the price of any residential property – so buy-to-let investors and those buying a second home can also benefit. However, they will still have to pay the stamp duty surcharge that applies to second homes.
Since April 2016, people buying their second (or third) home in England and Northern Ireland have had to shell out an extra 3% on each stamp duty band (in Wales and Scotland, it’s 4%). So instead of paying 0% on the first £500,000 thanks to the holiday, they pay 3% in England and Northern Ireland – but that’s still better than it has been previously.
· On October 1st, 2021, stamp duty in England and Northern Ireland is set to return to previous levels:
· Up to £125,000 – no stamp duty tax applied
· The portion between £125,001 and £250,000 – 2%
· The portion between £250,001 and £925,000 – 5%
· The portion between £925,001 and £1.5m – 10%
· Above £1.5 million – 12%
· Note that first-time buyers already had a holiday where they did not have to pay stamp duty on properties costing up to £300,000 (and 5% up to £500,000).
Where the purchase is for an additional property (such as a second home or buy-to-let), the normal rates will come back into force on October 1st, plus the additional 3% rate:
· Properties up to £125,000 – 3%
· The portion between £125,001 and £250,000 – 5% (2% + 3%)
· The portion between £250,001 and £925,000 – 8% (5% + 3%)
· The portion between £925,001 and £1.5m – 13% (10% + 3%)
· The remaining amount, above £1.5m – 15% (12% + 3%)
Instructing a very good agent like James can significantly reduce the time it takes to sell your property from the national average of 6 months. The steps we use are:
1. Our valuation advice is based on 20 years of local experience and our constant monitoring of the local market… we suggest realistic market values.
2. We closely monitor pricing and value feedback from buyers who view the property.
3. We closely monitor the number of viewing clicks that each property is getting on property websites such as Rightmove.
4. We thoroughly vet the status of potential buyers.
5. We check that buyers have access to the funds to buy the property before any offers are accepted.
6. We check which solicitors buyers are proposing to use.
7. We advise our vendors to provisionally appoint a solicitor before they receive any offers.
8. We closely monitor, manage and chase the whole conveyancing process... of the whole chain... Our chain and progression are the best in the business.
At James, we have years of experience working with time-sensitive property sales and have used these tools and techniques to help speed up the process our trained team of experts go through. Which in the run-up to the end of the Stamp Duty holiday, could save you a substantial amount of money. If you have any questions regarding Stamp Duty or the process we can take you through please give James a call and we will help you as much as we can.
We know that the selling and letting process can be complicated, especially at the moment, but we try our hardest to be helpful, open, honest and offer as much help and advice as we can. Guiding you through the property journey in a way that you will not endure, but enjoy.
So if you’re considering a move in 2021, or would like a free valuation give James a call and know you are being taken care of by one of the best agents in the area…