First time buyers looking to get their feet on the property ladder can still benefit from a higher nil-rate stamp duty band - even though the holiday period has begun to wind down.
A temporary holiday on the amount of money homebuyers paid in Stamp Duty Land Tax (SDLT) was introduced in June 2020 to help stimulate the property market amid the Covid pandemic.
The stamp duty holiday proved a big hit with house movers who jumped at the chance to save on SDLT fees, leading to a surge in demand for houses with more space and gardens.
An imbalance between supply and demand, particularly for properties with more room inside and outside, coupled with the stamp duty holiday have seen property prices skyrocket.
It remains to be seen what impact the reduced nil-rate threshold has on the market from, with experts split on whether house prices will drop or remain high as the holiday winds down.
But first time buyers have a reason to be cheerful.
What is the stamp duty holiday?
First time buyers have benefitted from the increased nil-rate SDLT threshold, which saw homebuyers exempt from paying tax on the first £500,000 of the property purchased.
The tax break introduced by chancellor Rishi Sunak has benefitted 1.3 million buyers across the UK since it was introduced up to 30 June 2021, according to data from Rightmove.
From 1 July 2021, however, the nil-rate threshold lowered from £500,000 to £250,000.
It will remain at 250,000 until 30 September 2021 before the nil-rate threshold returns to its normal £125,000 limit, which it was prior to the stamp duty holiday being introduced.
Do first time buyers pay stamp duty?
First time buyers will benefit from a higher nil-rate SDLT threshold from 1 July 2021.
They will be exempt from paying stamp duty on property purchases up to the value of £300,000 - despite the tax break threshold introduced by Mr Sunak being reduced to £250,000.
This is because first time buyers were exempt from paying the first £300,000 on a property prior to the incentive being introduced, with levels returning to pre-June 2020 levels.
First time buyers will only benefit from this tax break if the overall value of the property doesn't exceed £500,000, with 5% SDLT due on the amount above £300,000.
Do I qualify as a first time buyer?
If you are buying a property and wondering if you are a first time buyer then there are certain criteria you must meet in order to qualify for the higher nil-rate SDLT relief.
In general terms, the property you are purchasing must be your first - you have not owned a property before - and what you are buying is your only and main residence.
These rules apply for all properties whether they are UK or overseas, or property you may have inherited, while it doesn't apply to buy-to-let purchases either.
I'm a first time buyer but my partner's not
Homebuyers only qualify for first time buyer status and the subsequent higher nil-rate SDLT threshold if all the people on the deeds are first time buyers and meet the necessary criteria.
If you are a couple buying a property then both of you need to be classed as a first time buyer to be eligible, and this also applies if you are buying a property with a parent.
If you don't qualify for first time buyer status then you will still benefit from a higher nil-rate stamp duty tax, currently £250,000, up to 30 September 2021 before normal rates return.