THE stamp duty holiday is set to be extended for months by Chancellor Rishi Sunak in today's Budget.
The stamp duty holiday was due to expire on March 31, but it's set to be extended by at least three months until June.
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The Treasury first announced last year that it would temporarily raise the stamp duty threshold from £125,000 to £500,000 for property sales.
The rates apply to home buyers in England and Northern Ireland only, as they differ for those buying homes in Scotland and Wales.
The temporary holiday was introduced to get the property market moving again following the coronavirus crisis.
However, many people have been left scrambling to complete their transactions before the deadline, worried that if they don't, they could be left with a hefty tax bill.
The Times reports that the stamp duty holiday will be extended by another three months until June.
What is stamp duty?
STAMP duty land tax (SDLT) is a lump sum payment anyone buying a property or piece of land over a certain price has to pay.
Up until July 8, 2020, most house-buyers in England and Northern Ireland had to pay stamp duty on properties over £125,000.
This was temporarily increased to £500,000 until March 31, 2021 in the government's mini-Budget in July 2020 – but has now been extended.
The rate a buyer has to fork out varies depending on the price and type of property.
ates are different depending on whether it is residential, a second home or buy-to-let, or whether you're a first-time buyer.
The usual system in England for residential properties means:
- First-time buyers pay nothing on properties below £300,000 (and relief available on properties of up to £500,000)
- You pay nothing if the property costs below £125,000
- You pay 2% if it is worth between £125,001 and £250,000
- You pay 5% if between £250,001 and up to £925,000
- You pay 10% if it is between £925,001 and £1.5million
- You pay 12% on anything over £1.5million
For second homes or buy to let properties:
- 3% on purchases up to 125,000
- 5% on purchases between £125,001 and £250,000
- 8% on purchases above £250,001 and £925,000
- 13% on purchases above £925,001 and £1.5 million
- 15% on purchases above £1.5 million
Stamp duty rates are different in Scotland and Wales.
In December, an industry expert also warned a third of a house sales could fall through if it wasn't extended.
The usual stamp duty rates when there is not a holiday mean first-time buyers are exempt from paying stamp duty on the first £300,000 on properties worth up to £500,000.
The normal rates are also different if it's a second home or buy-to-let property, with an additional 3% on top of standard stamp duty rates.
We've rounded up all the rates above.
If a first-time buyer bought a property for £500,000, they'd save £10,000 in stamp duty thanks to the holiday.
Meanwhile, home movers who bought the average property for £248,000 would save £2,460 on stamp duty.
And Brits buying a second home for the average price tag would save a whopping £9,900.
The government has a handy calculator so you can work out how much you would pay on a property.
Although the nine-month stamp duty holiday may have sparked a mini-boom in the housing market, it has cost taxpayers an estimated £3.3billion.
Buyers looking to take advantage of the scheme before the deadline may well have missed their opportunity to get their sale completed in time.
Lockdown measures and pent-up demand for houses has caused the time it takes to buy a property to double, according to mortgage broker Trussle.
At the same time, a recent report by the Centre for Policy Studies (CPS) said the tax break had increased house sales to their highest level since before the 2007 financial crisis.
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