Stamp Duty Land Tax, also known as SDLT, is a form of tax paid by property or land buyers in Northern Ireland and England. The SDLT covers existing or new leaseholds, properties purchased via a shared ownership scheme, transferred properties or land used as a payment method. UK law says that after purchasing land or property within the United Kingdom, you have 14 days to pay your stamp duty.
The amount of stamp duty you pay is based on the purchase price of the property. The more expensive the land or property, the bigger your SDLT, and vice versa.
However many people mistakenly try to calculate their stamp duty based on their mortgage instead of the property’s price. A mistake like that can turn off anyone from buying property as the stamp duty tax will be falsely overblown. Calculate your stamp duty tax by using this online calculator.
What is the stamp duty holiday?
Soon after we got hit by the pandemic, we saw the introduction of something called stamp duty holiday. This “holiday” might enable people to save as much as £15,000. The £15,000 saving is calculated for properties worth £500,000. Let’s go through what the stamp duty is in detail.
The UK government introduced the Stamp Duty holiday to support the local housing market. This new legislation is in force since July of last year.
As a result, anyone that will purchase property or land before June 30th of 2021, that doesn't exceed £500,000, won't need to pay any Stamp Duty. It doesn't matter if you previously owned property or you are a first-time purchaser. You need to mind the date and the maximum cap, and you will be exempt from paying a Stamp Duty.
When does the stamp duty holiday in Northern Ireland and England end?
As mentioned above, the stamp duty holiday covers all property and land purchases before June 30th 2021. However, buying without stamp duty will be possible in certain situations.
First of all, buyers of residential properties whose cost doesn't exceed £250,000 won't need to pay any Stamp Duty starting from July 1st and September 2021. First-time property purchasers also won't need to pay any Stamp Duty for properties whose value doesn't exceed £300,000.
Furthermore, if the first-time purchaser wants to invest in property worth up to £500,000, they can get a discounted Stamp Duty rate.
Another change will be introduced starting on October 1st. From that date on, Stamp Duty will be paid on residential properties worth above £125,000. The only exception to this will be given to those that are first-time purchasers.
Those that plan to invest in a second home will also be affected after October 1st as they will be charged an additional 3% of Stamp Duty. This won't apply to properties whose value is below £40,000.
So, that pretty much sums the UK stamp duty holiday and all that you need to know to make the most of it.
>> HAVE MORE QUESTIONS ABOUT STAMP DUTY HOLIDAY? <<
If you are looking to understand how stamp duty holiday affects your paid tax we can help. Contact one of our mortgage advisers at – UK +44 (0) 203 883 1017 Hong Kong +852 6017 4140 – email info@cedar-crest.co.uk.
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