Stamp Duty Land Tax Holiday begins phasing out!

What changes have been made?

With effect from 1st July the Stamp Duty Land Tax (SDLT) for residential property changed to the following rates:

£0 – £250,000 = 0%

£250,001 – £925,000 = 5%

£925,001 – £1,500,000 = 10%

£1,500,000 + = 12%

Please note that in addition to these rates, purchasers may be subject to the 3% surcharge for additional dwellings and the 2% surcharge for non-residents.

What effect did the SDLT holiday have on the property market?

The SDLT holiday encouraged more people to purchase a property during the pandemic. In turn, this high demand increased average property prices by 8.9% in the 12 months up to May 2021. But, the SDLT holiday was probably not the only reason why property demand increased so dramatically. During the Covid-19 lockdown, many people were spending more time in their homes than ever before. This caused many people to reconsider what they wanted from their homes with most looking for a more spacious property which helped fuel the property market.

How many people have taken advantage of the SDLT holiday?

Data from Rightmove has suggested that 1.3 million people have taken advantage of the SDLT holiday across the country.

How will this affect the property sector?

The end of the SDLT holiday may result in the property market going through some sort of price correction. This is due to the SDLT holiday increasing demand to a point where demand outpaced supply, which saw house prices skyrocket. When the SDLT holiday ends completely we would expect to see a decline in demand from October.

Capital gains tax returns

Don’t forget that if you sell a property which has not been your main residence throughout your ownership, there may be a capital gains tax liability.  If so, you must report the liability to HMRC and pay the tax within 30 days of completion.  This is done using a special online form which is submitted to HMRC.  We can assist you with this process.

How can we help?

Hawsons have a team of dedicated property and construction accountants at our offices in Sheffield, Doncaster, and Northampton. We have plenty of experience of dealing with complicated SDLT and capital gains tax issues. Having an accountant who understands the challenges of this dynamic sector and is able to help you plan for the future is an advantage in a competitive environment. At Hawsons we have a great deal of experience in advising and helping businesses in property and construction and we can assist you as your business grows.