Whether you’re buying your first home or your third, stamp duty can be a little confusing to get your head around.
Especially with all the new rules and changing legislation that has been announced by the UK government since the start of the pandemic. So, to help shed some light on stamp duty and the changing situation for homebuyers this year, we’ve answered a few frequently asked questions below.
What is stamp duty?
Stamp duty is the money you pay to the taxman when you buy a home worth over a certain value. And depending on the value of your new home, the stamp duty can range from 2% to 12%.
How is it paid?
Stamp duty is paid once you have bought your new home. Usually this is managed for you by either your solicitor, agent or conveyancer who will pay the money on your behalf on the day of completion and add the amount to their fees. If you’re eligible for any relief (for example, if you’re a first-time buyer), they’ll also claim that for you too.
What are the current rules?
Earlier this year Chancellor Rishi Sunak extended the stamp duty holiday until the end of June 2021. This means you don’t have to pay any stamp duty on homes worth up to £500,000 until the 30th June, saving your thousands on your new home.
What happens after 30th June?
From the 1st July and until the 30th September the Stamp Duty holiday is being tapered. This means there is no stamp duty to pay on homes worth up to £250,000.
What happens from 1st October?
On the 1st October the stamp duty holiday will come to an end and return to the following levels:
Homes up to £125,000 – no stamp duty tax applied
£125,001 and £250,000 – 2% stamp duty
£250,001 and £925,000 – 5% stamp duty
£925,001 and £1.5m – 10% stamp duty
Above £1.5 million – 12% stamp duty
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