Q. As the stamp duty holiday in the U.K. begins its phase out, what savings are left, who is eligible and when does it end?.
A. Homebuyers in England and Northern Ireland have benefitted from temporarily reduced Stamp Duty Land Tax rates since July, otherwise known as a stamp duty holiday. The transfer tax was waived on the purchase price up to £500,000 (US$690,000), saving buyers up to £15,000.
The tax break was originally set to expire in March, but was fully extended through June. The full benefits expired on Wednesday, but savings are still available for homebuyers over the summer.
From Thursday through Sept. 30, the first £250,000 is exempt from the transfer tax. After that, resident buyers will pay 5% on the portion from £250,001 to £925,000; 10% on the amount between £925,001 and £1.5 million, and 12% on the remaining balance, according to the government.
Rates will return to pre-pandemic levels in October. That means the no-transfer tax threshold will return to £125,000, with a 2% duty on the portion between £125,001 and £250,000; 5% on the amount between £250,001 and £925,000; 10% on the portion £925,000 and £1.5 million, and 12% on the cost over £1.5 million.
There is also a 3% surcharge when buying additional properties, such as a second or third home, which still applies to all purchases, according to the government. And if you’re a foreign buyer, the U.K. government recently added a 2% surcharge.
The stamp duty holiday has benefitted about 1.3 million home buyers across the U.K. since it was implemented last summer, Mansion Global reported this week. In addition, it has helped push property prices up 13.4% across the country.
Scotland and Wales also implemented stamp duty savings, but they have already expired.