On 8th July 2020 the Chancellor of the Exchequer announced a temporary holiday for SDLT on the first £500,000.00 of all property sales that take place in England and Northern Ireland between 8th July 2020 and 31st March 2021.
The SDLT holiday was introduced to encourage buyers to continue with their house purchases in a bid to keep the property market moving during these turbulent times. The hope is that, following the decrease in property transactions during lockdown, this will boost the property market which in-turn will assist with the recovery of the UK economy.
But what does this mean for you and how much could you potentially save?
For first time buyers, this now means that you can purchase a property up to £500,000.00 and pay no stamp duty. The previous threshold for first time buyers to claim the FTB Relief was £300,000.00 with any consideration between £300,000-£500,000 attracting stamp duty at 5% i.e. first time buyers purchasing a property at £500,000.00 can now save £10,000.00 under the temporary relief rules. First time Buyers purchasing above £500,000.00 were not entitled to FTB SDLT relief under previous rules.
For anybody thinking of moving home and replacing their main residence, there will be no SDLT to pay on property purchases up to £500,000.00. If you are purchasing a property above £500,00.00 SDLT will be paid on a sliding scale for anything above £500,001.00 (i.e. 5% for any consideration between £500,000.00 and £925,000.00, 10% on any consideration between £925,001.00 and £1.5m and 12% on any consideration paid above £1.5m. The new SDLT relief could therefore save you up to £15,000.00.
What if you wish to purchase an additional property i.e. buy to let property or second home? Under the new SDLT Relief rules, you will now only pay 3% on anything up to the value of £500,000.00. Previously you would have paid 3% up to £125,000.00, then 5% on any consideration paid between £125,001.00 and £250,000.00 and 8% on anything between £250,001.00 and £925,00.00 and so on. i.e. under the previous rates you would have paid £30,000.00 SDLT on an additional property purchase at £500,000.00 but under the new rules you will now only have to pay £15,000.00.
The new relief does not only benefit individuals but also companies purchasing residential properties can also benefit from the same savings when purchasing a buy to let or additional property.
For anyone considering purchasing a new residential property prior to 31st March 2021, you can use the Government calculator (copy the link below into your search engine) to check exactly how much SDLT is payable dependant upon your circumstances.
Government SDLT calculator: https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro
For any further information or property advice, or if you are thinking of taking advantage of the temporary SDLT Relief by purchasing a new property, please contact us for a competitive quote either by telephone (on 01942 206060) or email at firstname.lastname@example.org