Homebuyers latest: Tapering of stamp duty land tax begins

The tapering down of the temporary Stamp Duty Land Tax (SDLT) that was introduced on 8 July 2020 in response to the pandemic and subsequently extended in the spring Budget has begun. The temporary extension of the nil rate band to £500,000 ended on 30 June 2021. This saw many homebuyers unable to complete their transactions on time with solicitors struggling to cope with the increased demand.

From 1 July 2021 until 30 September 2021, the nil rate band will be £250,000. The nil rate band will return to the standard amount of £125,000 from 1 October 2021. This applies to England and Northern Ireland only.

No SDLT is payable for first-time homebuyers making a purchase of up to £300,000. The first-time buyer’s rate was superseded by the temporary SDLT holiday until 30 June 2021.

Special rules and rates for first-time homebuyers

However, from 1 July 2021, the special rules and rates for first-time buyers apply. The first-time buyer’s relief also applies to the first £300,000 for purchases up to £500,000. This has the effect of increasing the nil-rate threshold to £300,000 for first-time buyers of properties costing up to £500,000. There is no relief available for first-time buyers spending more than £500,000 on a property. There are requirements that must be met to qualify for the relief.