The final day on which the Stamp Duty Land Tax (SDLT) relief is applicable is on Thursday 30th September 2021. After this date thresholds will revert to the previous values, these being:
£125,000 for residential properties
£150,000 for non-residential land and properties.
The SDLT holiday was introduced on the 8th of July 2020 to stimulate the property market, post-lockdown. It is evident this aim has been successful through the record transaction volumes and house prices over the last year. Indeed, the second wave of demand for more space is anticipated to keep driving house prices higher across the United Kingdom, with values set to rise by up to 3.5% a year between 2022 and 2024, according to the latest reports in the Guardian on the 27th September 2021.
Many have alluded to a crash in the property market, or at a minimum a sharp correction and a drop in transactions. Whilst there will be a readjustment and price correction as buyer activity eases over the coming months, a sudden crash is overstated.
Despite the stamp duty holiday providing much-needed support to the housing industry, the inadvertent impact was the financial exclusion for many first-time buyers. However, if prices in the property market start to level off or decline this will enable first-time buyers to re-enter the market.
Moreover, the expected price correction signals great news for first time buyers as relief will still be available for properties less than £300,000. Where the purchase price is over £300,000 but does not exceed £500,000, a first-time buyer will pay 5% SDLT on the amount above £300,000.
To work out the current SDLT of a property you are looking to purchase, please visit the SDLT Calculator.
XYZ are happy to assist anyone looking to take advantage of the reduced SDLT rate. Head over to our contact form to get your conveyancing quote.