Property – the end of the Stamp Duty holiday

The temporary increase in the SDLT nil-rate band to £500,000 has been extended until 30 June 2021. After this, the nil-rate band will be reduced to £250,000 until 30 September 2021, before returning to its standard level of £125,000 on 1 October 2021.

For those currently in the process of buying a home or investment property, these deadlines are critical. Missing a deadline by even a day could result in a tax bill of thousands of pounds. It is important to work closely with your solicitor and mortgage lender to ensure your transaction is completed on time.

Managing the transition

If you are part of a property chain, delays are common. You must budget for the possibility that your transaction may slip past the deadline, resulting in a sudden increase in your SDLT liability. Ensure you have the necessary funds available to cover this eventuality, or you risk the entire chain collapsing.

Impact on first-time buyers

First-time buyers will continue to benefit from their specific SDLT relief. Once the holiday ends, first-time buyers purchasing a property up to £500,000 will pay no SDLT on the first £300,000, and 5% on the portion between £300,001 and £500,000. This provides a continuing advantage for those trying to get on the property ladder.

The 3% surcharge

Remember that the 3% surcharge for additional properties (such as second homes and buy-to-lets) still applies on top of the revised nil-rate bands. Investors must factor this significant additional cost into their yield calculations when considering new property purchases.