NH4U Articles

Time is running out to save on Stamp Duty

Posted in: Latest News

Time is running out to take advantage of the Government’s SDLT discount. If you are looking to sell a house, you will want to get it done in plenty of time to ensure you benefit from this discount. Sellers never pay Stamp Duty Land Tax, it is the buyers who pay and this will usually be sorted out by their solicitor - but this period of time and discount is making the property sector run much faster - so sell your house quicker with us, get in touch today.

What is SDLT?

SDLT is the acronym of Stamp Duty Land Tax. This tax is paid when you buy a property or land over a certain price in England and Northern Ireland. The tax is structured differently if the property or land is in Scotland or Wales, but it all fundamentally represents the same thing.
The tax is paid when you buy a freehold property, buy a new or existing leasehold, buy a property through a shared ownership scheme or you are transferred land or property in exchange for payment – this could be taking on a mortgage or buying a share in a house.

What is the SDLT discount?

The SDLT discount is the temporary reduction of Stamp Duty Land Tax rates. Any residential properties purchased between the 8th of July 2020 and the 31st of March 2021 will only see you starting to pay SDLT on the amount that you pay for the property above £500,000. It doesn’t matter whether you are buying your first home or you have owned property before, the rates apply to anyone.

How much is the discount?

Where people would usually pay Stamp Duty Land Tax on property value over £125,000, they now don’t need to pay unless the property is above £500,000. If a surcharge does apply, buyers will still have to pay that 3% surcharge so it is worth checking whether you are subject to one or not. 
As a general rule, the more expensive the property, the more you will save (up to the maximum of £500,000). The Chancellor mentioned in his economic statement that the average saving will be £4,500.

How much does the discount go up to?

The discount goes up to £500,000 with SDLT only being paid on the amount you pay for the property above £500,000. This is a marked increase from the original £125,000 before the temporary reduction came in. 

How long have I got to take advantage of this discount?

The discount is available until the 31st of March 2021 – once this date arrives, the original rates will come back into force and buyers will go back to paying SDLT on amounts specified in the different regions of the UK as it was before the discount was put in place. It can take up to 3-4 months on average to complete a property transaction so time is of the essence. If you sell your property to a first-time-buyer, the transaction may take a little less time as there is less property involved but this also depends on the people you are buying from and if they are also buying another property (a chain can slow things down). 

What can I do if I am ready to sell a property and want to utilise this discount?

You will need to get in contact with an estate agent like us to get the ball rolling. You will want a good estate agent such as NewHome4U who know how to find you exactly what you are looking for and is within your price range. We will be able to tell you the SDLT figure you will pay if the property you are selling is over £500,000 so you know exactly where you stand. With the average time to complete a property transaction being 3-4 months, it is important to get in contact with us as soon as possible to get everything set in place before the discount ends.

The housing market is the busiest it has been in ten years as lockdown has had a dramatic effect. The housing market had to close down for four whole months for the nationwide lockdown but upon its return, it saw a massive rise in activity.

Some of this surge can be directly attributed to the stamp duty taxation break as people look to make the most of the discount and save some money when buying their house. Usually Stamp Duty Land Tax is something you have to account for no matter what but with it not being taxed on up to an extra £375,000 more than usual, everyone is seeking the chance to avoid paying it and make those savings. Those with smaller, cheaper properties are avoiding paying it at all whilst those in larger, more expensive properties are paying it but at a massively reduced rate!

The whole team at NewHome4U are here to help you find the home of your dreams and to get everything set into place to sell your old property before the discount ends. Contact us today to start your search and find the property you want to buy and get the wheels in motion.

Why would I want to utilise this discount?

Buying a house is one of the most expensive things you can do and if there is something available to bring the costs down, why wouldn’t you want to take advantage of that? There are so many different things to consider when it comes to buying a home and many of these considerations happen to be cost-related. With so many extra things on top of buying a house, removing the potential to pay as much, if any, SDLT, is surely something worthwhile.

With just a few months left to take advantage of the SDLT discount, the time is now to get the ball rolling when it comes to buying a property. The market is booming and you don’t want to miss out on a discount that is unlikely to come around again.

Contact us today - we look forward to hearing from you!