A guide to the temporary stamp duty relief until 30/09/21
Cute piggybank image to reflect the law type Property - Residential

Stamp Duty relief holiday ending soon

Property Purchases completing before 30 September 2021

Property - Residential

Please note that the current Stamp Duty relief period, for homes up to the value of £250,000, is coming to an end on 30th September 2021. All property purchases must complete by this date to achieve this relief.

Stamp Duty, or to give it its full title Stamp Duty Land Tax, has been around for centuries and is a tax that is paid by the buyer of land or property. The original name came from the fact that legal documents had to be physically stamped when the tax was paid. That is no longer the case, but you cannot register your ownership of your new house with The Land Registry until the stamp duty has been paid.

It is a complicated tax with all sorts of different rates and reliefs. The Gov.uk website has a useful calculator and pages which set out all the different rates at https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro.

In a bid to keep the property market vibrant through the pandemic the Government introduced a temporary relief for purchasers of residential property. This applies in England and Northern Ireland. There are different rules in Scotland and Wales.

Up to 30th June 2021

The rate of stamp duty for home purchases up to £500,000 was zero, but is now finished for all buyers

1st July to 30th September 2021

The rate is zero for purchases up to £250,000

After 1st October 2021

The zero rate goes back to its pre-covid level of being for purchases up to £125,000

Once a property has a purchase price above these zero rate levels the purchaser pays stamp duty at varying rates on the amount between these levels and the actual purchase price.

People who own more than one residential property pay a higher rate on the additional properties that are not their main residence, as part of the public policy drive to recover more tax from buy to let landlords and other multiple property owners.

The reliefs on stamp duty in place up to 30th September are very valuable for home purchasers and could save them thousands of pounds in tax. But there are some important points to appreciate.

First and foremost is that the property sale must have completed by the relevant date. Having made an offer or even exchanged contracts is not enough to get the relief. That means that there is going to be a rush to complete these transactions before the stamp duty relief cut off dates.

The pandemic has put pressure on virtually everyone in the home purchasing chain. Caseloads for conveyancers have gone up considerably since last summer and the organisations they must deal with such as banks, building societies and local authorities are sometimes slowed down as their staff are often working from home. This means that even the most well-run house purchase can take months to complete. The more people who are in a chain, often the longer it is to complete. There is not much that the conveyancing solicitors can do about some of these delays, and you need to be prepared for them and realistic about timescales.

You should identify and instruct solicitors as soon as you have found the house you want, and you should make sure that you respond to correspondence and requests as quickly as you can. Have an honest discussion with your solicitors about timescales. Very few solicitors are promising that they will guarantee for you to complete a purchase by a given date because of the potential delays in other parts of the process. In the final analysis it would be prudent to be prepared to pay the stamp duty if your property purchase does not complete by the relevant time.