Since the Chancellor announced the Stamp Duty Holiday in July 2020, we have seen huge demand for our conveyancing services from clients who are buying or selling their properties in Norwich, Norfolk and beyond. Coupled with increasing monthly house prices in the eastern region, and many who currently live in urban areas looking to move into more rural locations following lockdown, the property market in Norfolk is booming.
If you are considering your own house move, the details of the stamp duty holiday can initially appear quite confusing. Julie Palmer, Conveyancing Executive at Hatch Brenner Solicitors in Norwich has outlined the answers to some of the questions she is frequently asked about the topic here.
Stamp Duty Holiday FAQs
What is stamp duty?
People buying properties have to pay a tax called Stamp Duty which varies dependant on where you are in the UK and the value of the property. In England and Northern Ireland, buyers pay Stamp Duty Land Tax (‘SDLT’) and the current stamp duty holiday applies.
What is the stamp duty holiday?
The threshold at which SDLT is payable in England and Northern Ireland has been temporarily increased so anyone completing on a main residence costing up to £500,000 will not pay any stamp duty land tax – hence the ‘stamp duty holiday’. For properties over £500,000, the tax will only apply on the property’s value above £500,000.
For the average conveyancing transaction, the Chancellor has suggested the average SDLT bill would be £4,500 less than before the stamp duty holiday was introduced.
If the property you are buying is worth over £500,000, you will need to look up exactly how much SDLT you will need to pay under the stamp duty holiday scheme dependent on the value of the property in question. The Government SDLT calculator can be found here.
How does the stamp duty holiday benefit first time buyers?
Previous to the stamp duty holiday being introduced, first-time buyers did not pay SDLT up to a property value of £300,000. The temporary stamp duty holiday replaces this tax relief, meaning first-time buyers can now look at higher value properties up to a value of £500,000 to receive the same tax cut.
Who does the stamp duty holiday benefit the most?
The stamp duty holiday offers a particularly attractive reason to move for existing homeowners who may be considering moving to a larger property. These so-called ‘second steppers’, can now look at more expensive properties than they would have perhaps considered previously – given that they can save up to £15,000 in SDLT on a property worth £500,000. Previous to the temporary stamp duty holiday being introduced, SDLT was payable by second steppers for properties worth £125,000 and above.
Does the stamp duty holiday apply to second homes?
Both those buying second homes, and those prospective landlords buying investment properties also qualify for the temporarily SDLT holiday under the Chancellor’s scheme. Whilst they do not have to pay SDLT on properties up to a value of £500,000, they do have to pay an extra 3% of stamp duty as previously charged under the rules before the introduction of the stamp duty holiday.
When does the stamp duty holiday end?
The temporary increase to the stamp duty land tax threshold in England and Northern Ireland is set to finish on 31 March 2021.
What is the latest date to instruct a solicitor by to benefit from the stamp duty holiday?
On average, the conveyancing process of buying or selling a property in England and Northern Ireland can take around 12 weeks. SDLT is paid within 14 days of completion of the property purchase transaction. Therefore, to benefit from the stamp duty holiday, you will reasonably want to have your offer accepted on the property you are looking to buy before the end of 2020. Bearing in mind other delays given local lockdowns, and the continued rise in coronavirus cases, it may be prudent to act sooner rather than later if you are looking to benefit.
If you are selling your home and need to instruct a Conveyancing Solicitor in Norwich, we can help. Contact the team by calling 01603 660 811 or email firstname.lastname@example.org