Stamp Duty Land Tax holiday – Does it apply to you?
For most of us, due to COVID-19, holidays have either been delayed or placed upon hold. However, the Government have introduced a ray of sunshine for those contemplating purchasing a property.
In his Summer Statement, Chancellor Rishi Sunak announced a ‘holiday’ for the payment of Stamp Duty Land Tax which is to last until 31st March 2021. Unfortunately, for those who have completed on a purchase before 8th July 2020 the stamp duty holiday is not retrospective.
Stamp Duty Land Tax is a tax imposed on the purchase of a property in England and Northern Ireland. Historically, the payment of the tax was certified by a physical stamp being attached onto the document effecting the transfer to represent payment, which is where the name originates.
Here are the main points:
- These measures only apply to properties in England and Northern Ireland.
- You will benefit from the holiday if you, as an individual or a company, completed the purchase of a residential property, whether leasehold or freehold, on or after the 8th July 2020 and on or before the 31st March 2021.
- For transactions where the purchase price is £500,000 or less there will be no Stamp Duty payable.
- The next £420,000 of the purchase price i.e. the portion from £500,001 to £925,000, tax will be charged at 5%.
- The next £575,000 of the purchase price i.e. the portion from £925,001 to £1.5m tax will be charged at 10%.
- For purchases over 1.5m, the portion exceeding that figure will be charged at 12%.
- The previous First Time Buyer Stamp Duty relief is replaced by the above.
- Second homes including holiday homes or properties bought by buy to let investors remain subject to the higher rate of 3% on top of the revised rates remains e.g. for transactions where the purchase price is £500,000 of less there Stamp Duty will be charged at 3%.
Given the average value of a home in the UK the vast majority of buyers will now not pay any SDLT and whilst first time buyers are unlikely to receive any financial benefit they will hopefully benefit from an increase in the number of properties now being put on the market for sale.
At Butcher & Barlow, we are fully accredited members of the Law Society’s Conveyancing Quality Scheme (CQS), a recognised quality standard for local conveyancing solicitors. Your transaction will be dealt with by a dedicated local conveyancing solicitor, with the expertise to ensure that the process runs as smoothly and swiftly as possible. We are also able to act for all major lenders. Contact your local office for a no obligation quote.