29 March, 2021
On 8th July 2020, the Chancellor of the Exchequer announced a temporary stamp duty holiday for properties in England and Northern Ireland that cut the rate of stamp duty to zero percent for all properties £500,000 or under until 31st March 2021. Rishi Sunak has now confirmed an extension until 30th June 2021.
You must pay Stamp Duty Land Tax (SDLT) if you purchase a property or land over a certain price in England and Northern Ireland.
You pay the tax when you:
|Property or lease premium or transfer value||SDLT rate|
|Up to £500,000||Zero|
|The next £425,000 (the portion from £500,001 to £925,000)||5%|
|The next £575,000 (the portion from £925,001 to £1.5 million)||10%|
|The remaining amount (the portion above £1.5 million)||12%|
The chancellor announced a new 95% mortgage guarantee for first time buyers in the 2021 spring budget to help more people get on the property ladder.
Starting in April the government will provide a guarantee to lenders who offer mortgages to people with a deposit of just 5% on homes with a value of up to £600,000.
The government says the scheme will allow more people to become homeowners by allowing them to buy a property with this lower deposit guarantee.
The major high street banks have confirmed their support including; Lloyds, NatWest, Santander, Barclays and HSBC will be offering 95% mortgages from April, with other lenders including Virgin Money expected to launch products later.
Overall, it is good news that the stamp duty holiday is being extended for purchasers. For our RP clients with significant sales programmes, this also means a surge in property buying and the market will start to regain competitive rates. Despite this, we know our clients are mindful of maintaining the affordable nature of their schemes (particularly where this is a requirement of grant funding or planning conditions). .
Let's see what packages become available in the coming weeks for new homeowners in relation to the above as well as leasehold reform, the new grant programme and right to shared ownership proposals… watch this space!
For more information contact Scarlett Ash in our Housing & Regeneration department via email or phone on 01254 222442. Alternatively send any question through to Forbes Solicitors via our online Contact Form.