March 16 2021

Chancellor Reinforces Foundations Of Property Market

March 16 2021

Chancellor Reinforces Foundations Of Property Market

Author: Select Property GroupCategory: UK Property
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(Please note: Select Property Group is not a tax advisor. Please use this article as a guide only and contact your financial advisor for further support).

The Spring Budget 2021 included some highly anticipated news for the UK property market and proved to be a very significant budget for the sector.

Summary:

  • The Chancellor of the Exchequer Rishi Sunak announced in his Spring Budget (on March 3rd, 2021) that there was to be an extension of the Stamp Duty Land Tax (SDLT) holiday in England and Northern Ireland.
  • Stamp Duty is a tax that is levied on residential property in the UK and payable by the purchaser. 
  • Previously due to end on 31st March 2021, the SDLT holiday deadline is now extended to 30th June 2021.
  • The news has been welcomed by industry experts and property professionals from the UK and overseas.

 

The announcement by Mr Sunak in the March Budget is a clear reflection of how important the property market is to the recovery of the UK economy following the COVID-19 pandemic.

The extension of the SDLT holiday is thought to be pivotal in bolstering the UK economy, and continuing to solidify the historically strong UK Property market. The long-term growth and security of this key industry has always been a priority of the UK government.

The stamp duty rates that will now be in effect for UK residents, first home until 30th June are as follows:

  • Up to £500,000 – no stamp duty
  • £500,001 to £925,000 – 5%
  • £925,001 to £1.5m – 10%
  • Above £1.5m – 12%

 

Britain’s housing market experienced a fall in activity during the first 2020 COVID-19 lockdown. Following the introduction of the SDLT holiday last summer, the market experienced a mini ‘boom’, with hundreds of thousands of people able to buy new property.

Many of these homebuyers were looking for more outdoor space and more flexible living areas having been cooped up in their homes for so long.

How does this affect property investors and overseas buyers?

Property investors are also set to benefit from the SDLT holiday extension.

Overseas purchasers or UK residents buying a second property are subject to an SDLT surcharge and this remains, but the SDLT threshold of GBP 500,000 also applies. This means that thousands of pounds of savings are within reach for investors looking to capitalise on the buoyant UK property market.

New SDLT holiday rates – effective from April 1st 2021:

(Please note the below only applies to residential property, student property may differ. Also, multiple purchases on residential property).

Tax table

More detailed information about the SDLT savings and how buyers can take advantage of this with Select Property Group is here.

Industry reaction

The most recent announcement has been greeted very positively by industry experts, although the news wasn’t surprising as rumours about it had been circulating in the media for some time. Many professionals had warned that a third of all house sales could fall through if it wasn’t extended.

Tom Bill, head of UK residential research at Knight Frank commented that: “The extension is fair because completion dates for buyers and sellers have been jeopardised through no fault of their own.”

Paresh Raja, CEO of Market Financial Solutions: “Extending the stamp duty holiday is exactly what the property market needs. The appetite among buyers remains strong, and it makes sense for the Government to build on this momentum through targeted tax reliefs. The market response will be immediate…”

Capitalise on the SDLT extension with Select Property Group 

The COVID-19 pandemic has created much uncertainty in many different industries across the world. However, property will always be a tangible and attractive asset that works well for those investors with long-term goals.

Residential property in the UK has always been known as a strong market, and the new SDLT holiday extension means there has never been a better time to invest.

Our residential developments in the UK are located in prime city centre locations & top performing investment cities. Because they are Select Property Group developments, our investors can rest easy know that the properties are built to the highest standards, with every amenity and detail taken care of.

Speak to a member of our global team today to see how we can help you to fully capitalise on the extended SDLT holiday.

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