Stamp duty holiday

To kick start the housing market, the UK governments have announced a stamp duty holiday. In England and Northern Ireland the holiday will last until 30 June 2021.

In England and Northern Ireland, stamp duty will only apply if the property you buy is worth over £500,000.

In Wales, stamp duty is known as land transaction tax. Until 30 June 2021, properties under £250,000 won’t have to pay land transaction tax. This doesn't apply to second homes or buy-to-let properties.

And in Scotland, stamp duty is known as land and buildings transaction tax. Until 31 March 2021, land and buildings transaction tax won't apply to buildings worth less than £250,000. This doesn't apply to second homes.

What is stamp duty?

Stamp duty is a tax that’s payable when you buy property or land. In Scotland it’s known as Land and Buildings Transaction Tax and in Wales as Land Transaction Tax.

The amount of stamp duty you pay depends on the purchase  price, whether it’s your first property and where in the UK the property or piece of land is.

The thresholds and rates are set by the UK government for England and Northern Ireland and by the devolved governments in Wales and Scotland.

First time buyer stamp duty

Before the stamp duty holiday was introduced, first-time buyers could take advantage of higher thresholds on the property purchase price to enjoy reduced rates or avoid paying stamp duty altogether.

The exact rates and thresholds varied between those set by the UK government covering England and Northern Ireland and the devolved governments in Scotland and Wales.

Stamp duty and mortgages

Stamp duty tax is just one of the fees you should factor in when taking out a mortgage on a new property.

It’s possible to add any stamp duty payable on your property purchase to the mortgage amount. Doing this means you avoid having to pay an upfront lump sum, but it will add interest to your mortgage over the duration of the mortgage term and will also affect your loan to value ratio (LTV).

If you’re looking to remortgage, out remortgage comparison service quickly and easily shows you the rates and deals on offer from some of the UK’s top lenders.

You should think carefully before securing debt against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

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