Residential Property – Budget Update, March 2021

The Chancellor has announced the extension of the Stamp Duty Land Tax holiday (SDLT) for purchases up to £500,000 until the 30^th June 2021. This is welcome news.

From 8^th July 2020, a nil rate band for SDLT for residential property transactions has been in place for the following scenarios:

1. If you are a first time buyer the starting value at which SDLT is payable is £500,000;
2. If you are a previous home owner, replacing your main residence with a new main residence the starting value at which SDLT is payable is £500,000;
3. If you are a home owner who will own two or more properties when you complete your purchase and you are not replacing your main residence, you will pay a 3% starting higher rate SDLT on values up to £500,000.00 followed by standard higher rate tax brackets from £500,001.00 upwards.

The extension of the SDLT holiday until the end of June 2021 will provide a considerable degree of relief for purchasers who wished to complete before the original deadline of 31 March 2021.

However, from 1^st July 2021 to 30^th September 2021, purchasers should be aware that the nil rate band for SDLT will be reduced to £250,000 and following this, the original nil rate band of £125,000 will be reinstated from 1^st October 2021.

The Chancellor has also announced help for first-time buyers in the form of a "government guarantee" to Lenders for mortgages where a first-time buyer is providing a 5% deposit. The Chancellor said that Lenders such as a Lloyds, NatWest, Santander, Barclays and HSBC are already on board, and it is hoped that more will follow. We await details of the scheme with interest.

We are hopeful that these initiatives will help to stabilize a buoyant residential conveyancing market and lead to sustainable growth.

We recommend that you seek advice from us at an early stage when buying or selling residential property so that we can help you make your next move as smoothly as possible.

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