22 July, 2020
SDLT is stamp duty land tax - a tax on properties bought in England and Northern Ireland. The rate to be paid depends on where in the UK the property is bought, the price of the property and the reason for the purchase.
In a bid to rejuvenate the UK property market, the Chancellor of the Exchequer, Rishi Sunak, announced a stamp duty land tax (SDLT) holiday for homebuyers in England and Northern Ireland on 8 July 2020. SDLT costs have been reduced by up to £15,000. The holiday means that 'standard' residential properties purchased up to a value of £500,000 would not incur SDLT, increasing this threshold from £125,000 which it was prior to 8 July 2020. Reduced rates will last until 31 March 2021, so long as completion occurs between 8 July 2020 to 31 March 2021.
During the holiday period, there are also some provisions to assist those "higher rates" purchasers also. Therefore, practically everyone will benefit from the reduced rates, provided they complete their transaction in the holiday period. The reduced rates are not limited to homebuyers or first-time buyers. Investors, traders and developers also benefit. Please do get in touch with us to discuss your proposed property transactions and what the implications of the 'holiday' will be for you we have a variety of property specialisms - Residential, Commercial, Housing and Public Sector
The reduced rates of SDLT for "standard rates" are as follows:
|Tax Band||Tax Rate|
|So much as does not exceed £500,000||0%|
|So much as exceeds £500,000 but does not exceed £925,000||5%|
So much as exceeds £925,000 but does not exceed £1,500,000
|The remainder (if any)||15%|
Standard rates apply for example where buyers have no other properties or where they are selling an existing home and buying a new one.
For a number of our clients the SDLT holiday won't impact upon their transactions due to their value or due to reliefs that are already available to them. The decision whether to buy now is a personal one and really boils down to whether you are in a position to buy now. If you are then it may be an opportunity to save on SDLT which can add a significant cost onto a property purchase e.g. pre-8 July 2020 to purchase a standard residential property for £300,000 without any SDLT relief applicable would have cost £5,000 in SDLT liability (on top of other fees for moving house such as searches, legal, removals and estate agents). If your purchase completes during the holiday period this £5,000 would not be payable.
For more information contact Aisha Bhailok in our Housing & Regeneration department via email or phone on 01772 220240. Alternatively send any question through to Forbes Solicitors via our online Contact Form.