You should buy a home in next two weeks to get £15,000 stamp duty discount

TIME is running out for homebuyers to take advantage of a stamp duty discount of up to £15,000 when buying a home.

Buyers need to get the ball rolling on a house purchase before the end of the month so they don’t miss out on potential savings, experts have warned.

Many people won't have to pay stamp duty if they buy a home before March — Many people won’t have to pay stamp duty if they buy a home before MarchCredit: Alamy

A temporary stamp duty holiday introduced over the summer comes to an end in March next year.

But the length of time it takes to find a property, make an offer and complete a sale means that buyers need to act sooner rather than later.

You usually have to pay stamp duty on properties worth more than £125,000, or £300,000 for first-time buyers.

This threshold was temporarily increased to £500,000 in July by the government to boost house sales.

It means buyers could save as much as £15,000 when buying a property.

Mortgage experts at Legal and General have warned that the length of the house buying process means buyers need to start their search by 1 November.

There’s also the prospect of further coronavirus restrictions and the Christmas holidays which can slow house sales.

What is stamp duty?

STAMP duty land tax (SDLT) is a lump sum payment anyone buying a property or piece of land over a certain price has to pay.

Up until July 8, most house-buyers in England and Northern Ireland had to pay stamp duty on properties over £125,000.

This was temporarily increased to £500,000 until March 31, 2021 in the government’s mini-Budget in July 2020.

The rate a buyer has to fork out varies depending on the price and type of property.

Rates are different depending on whether it is residential, a second home or buy-to-let, or whether you’re a first-time buyer.

The usual system in England for residential properties means:

First-time buyers pay nothing on properties below £300,000 (and relief available on properties of up to £500,000)
You pay nothing if the property costs below £125,000
You pay 2% if it is worth between £125,001 and £250,000
You pay 5% if between £250,001 and up to £925,000
You pay 10% if it is between £925,001 and £1.5million
You pay 12% on anything over £1.5million

For second homes or buy to let properties:

3% on purchases up to 125,000
5% on purchases between £125,001 and £250,000
8% on purchases above £250,001 and £925,000
13% on purchases above £925,001 and £1.5 million
15% on purchases above £1.5 million

Stamp duty rates are different in Scotland and Wales.

L&G arrived at the deadline for starting the house search after asking mortgage advisers, conveyancers and estate agents.

It estimates the homebuying process is taking an average of 15 weeks at the moment, with such high levels of demand and delays as a result of coronavirus.

And for those with more complicated circumstances it could be 17 weeks.

Estate agents said the average time between offer and completion has increased by eight weeks.

Mortgage applications are taking longer than usual too, L&G found, particularity for those with more complicated circumstances such as people who have been on furlough.

As many as 200,000 people risk missing out because lenders are struggling to keep up with demand, experts estimate.

The coronavirus crisis brought the housing market to a standstill but after the restrictions were lifted sales have boomed.

That’s been driven by the pent up demand as well as buyers scrambling to take advantage of the stamp duty holiday.

Kevin Roberts, director of L&G Mortgage Club, said: “The government’s stamp duty holiday has helped to encourage many hopeful buyers to press ahead with their homeownership plans, providing a much-needed boost to the economy.

“However, those wishing to take advantage of the ‘holiday’ will need to plan carefully to avoid missing the March 2021 deadline, particularly if they have their own property to sell first.

“As homebuyers rush to take advantage of the stamp duty holiday, policy makers need to consider if a tapering of the stamp duty deadline is needed instead of a hard deadline.

“We need to avoid those moving or purchasing a home missing out through delays after 31 March when the holiday ends.”

House prices are set to fall by nearly 14% next year, experts predict, as the property market feels the impact of coronavirus and the stamp duty holiday come to an end.

Boris Johnson plans to get millions of Brits on the property ladder by turning Generation Rent into Generation Buy.

Looking to buy or sell a home? Check out our guide on what’s next for house prices.

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This post first appeared on thesun.co.uk