Earlier in 2020, the government announced that they will be giving property buyers a holiday from paying stamp duty on properties purchased up until the end of March 2021 up to the value of £500,000 for everyone, not just first-time buyers. Stamp duty is a land tax that must be paid on properties over a certain price.
Usually, the £500k stamp duty rule only applies to first time buyers. Regular stamp duty rules will be re-applied from 1st April 2021, where you will pay either no or a discounted stamp duty tax as long as both the following apply:
- If your property price is less than £500,000
- If you are a first-time buyer
The thresholds for other property buyers will return to:
- £125,000 for residential properties (currently set at £500,000 as part of the stamp duty holiday period)
- £150,000 for non-residential properties
How can I benefit from the Stamp Duty Land Tax Holiday?
If you are wanting to take advantage of not paying stamp duty or paying a reduced amount, you should really be looking at buying your new home as soon as possible. This is to ensure that your sale goes through in time and before the deadline ends on 31st March 2021.
If you are first-time buyer, you will still have the opportunity to pay reduced or no stamp duty on your new property as long as the value is below £500,000, as mentioned above and on the government website. This will allow you more time to save for that all important deposit.
However, if you are an existing homeowner, the window is closing for you to sell your existing home and find and purchase a new one in order to take advantage of the stamp duty break. The journey from beginning to the end of your property search and exchange can sometimes take longer than expected, so now (before Christmas 2020) is really the best and last time for you to take action.
How long does it take to buy a new property?
Depending on your circumstances, there are many factors that need to be considered when planning timelines for exchanging properties. The steps to buying a new property can be summarised in the following points:
- Find a property.
- Speak to a mortgage advisor and get an agreement in principle based on your current financial circumstances.
- Make an offer.
- Apply for a mortgage (this can take from 2 weeks, but can also take longer if the lender wants to get further property valuations)
- Mortgage offer gets accepted.
- Your solicitor starts the conveyancing.
- You exchange contracts.
- You move into your new home.
This process can be a little more complicated if you are also selling a property in order to buy your new one, as timing will be everything and when there is a ‘chain’ (such as you selling your home, or the existing owners of the property you want to buy are also applying to purchase their own new home), things can take a little longer to fall into place.
So, it could take up to a couple of months but it could also be longer depending on your circumstances. This is why, if you plan to move before the end of March 2021 and avoid paying more stamp duty than you have to, you should get the ball rolling now. If you have been thinking about moving but you are not sure if it is the right decision – speak to the Graham & Co team for free advice on selling your home and to look at what your options are. Get in touch on 01264 356500 or email us at [email protected] and we look forward to helping you find your dream home.