The Stamp Duty Land Tax Holiday has proved successful in sparking housing market activity over the last few months. And it’s not just your average home buyer that is benefitting from the temporary changes introduced by the scheme, even landlords are saving money while adding to their property portfolio.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice.
Saving on property purchases
While homebuyers, especially those in areas with higher property prices, are without a doubt benefitting from the SDLT holiday – the temporary increase of the price threshold of properties on which they are taxed – landlords can also reap some reward.
If you’re a landlord buying a second property or additional properties as part of your investment portfolio, you can take advantage of the stamp duty holiday. However, you will still need to pay the 3% surcharge that is associated with buying an additional property. It’s not exactly the outcome landlords would have asked for, but will help.
Previously, those buying a second home or property would pay 3% on the first £125,000 of the price and then 5% on the next £125,001 to £250,000.
The tax rate operates on a sliding scale and is detailed below:
Property Price | Stamp Duty Rate |
---|---|
£0 – £500,000 | 3% |
£500,001 – £925,000 | 5% |
£925,001 – £1.5m | 13% |
Over £1.5m | 15% |
This means that if right now you purchase an additional home worth £500,000, you would save £15,000, half of what you would pay normally.
This savings boost has helped spark activity in the homebuyer market and the hope is that it also spills over into the buy-to-let market despite still having to pay some tax.
Savings deadline
Because of the shift in working conditions thanks to lockdown restrictions, the home buying process is taking longer than usual. So, there have been calls to extend the stamp duty holiday past the original 31 March 2021 deadline.
Concerns over completing purchases in time and the consequences of deals falling apart is top of mind for many. Some are calling for a phased or tapered approach to reduce disruption, but there hasn’t been any official word about extensions just yet.
Since time is still very much of the essence, don’t hesitate to get in touch with a professional who can help with the property buying process. Don’t let the opportunity for savings go to waste, contact Dental & Medical Financial Services today.
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