Despite repeated statements confirming that the Stamp Duty Land Tax (SDLT) Holiday introduced on 8 July 2020 would end on 31 March 2021 as planned; the Chancellor has now extended the deadline to 30 June. This means that the tax-free element of a purchase is maintained at £500,000 until 30 June 2021. If you are purchasing for over £500,000 then you will make a saving of the SDLT that would ordinarily be payable of £15,000 but you will have to pay SDLT on that part of the purchase price over £500,000. Please revisit the Government’s SDLT Calculator to see how much you will need to pay.
SDLT is payable when you:
- buy a freehold property
- or buy a new or existing leasehold
- or buy a property through a shared ownership scheme
- in certain circumstances when you purchase additional percentage in a shared ownership scheme
- are transferred land or property in exchange for payment, for example you take on a mortgage or buy a share in a house
You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price threshold in England and Northern Ireland.
The threshold is where SDLT starts to apply. If you buy a property for less than the threshold, there is no SDLT to pay.
Given the extension to the SDLT Holiday the current SDLT threshold for residential properties is now £500,000 until 30 June 2021. This changes on 1 July 2021. For residential property purchases from 1 July 2021 to 30 September 2021 the SDLT thresholds will be £250,000
The threshold for residential properties will change again on 1 October 2021 and from 1 October 2021 the SDLT threshold will be £125,000 which is the threshold as it was before 8 July 2020.
Purchase of a residential property at £350,000 on 30 June 2021. SDLT payable £0
Purchase of a residential property at £350,000 on 1 July 2021. SDLT payable £5,000
Purchase of a residential property at £350,000 on 1 October 2021. SDLT payable £7,500
From 1 July 2021, you’ll get a discount (relief) that means you’ll pay less or no tax if both the following apply:
- you, and anyone else you’re buying with, are first-time buyers
- the purchase price is £500,000 or less
The tax threshold is £300,000 outside of London. What classifies as London is confirmed on the Government’s website.
You are a first time buyer purchasing a residential property for £350,000 on 1 July 2021. SDLT payable £2,500
Outside of England
Please note that this is the tax position in England and Northern Ireland. The tax is different if the property or land is in Scotland or Wales:
- Scotland pay Land and Buildings Transaction Tax. This is entirely outside of our jurisdiction and we cannot advise on the Scottish Property Law system
- Wales pay Land Transaction Tax if the sale was completed on or after 1 April 2018. At present there has not been confirmation that the Holiday on LTT has also been extended and as it stands this is payable as normal from 1 April. Aside from the variation in the purchase tax the process to
Whilst we have provided a number of examples it is best to check your particular SDLT position on the Government’s SDLT calculator. A link to the calculator is here https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro
Get in touch
In view of the fact all of your circumstances are different, it is always important to seek advice from an experienced law specialist to discuss your circumstances and consider the different options available to you.
If you wish to speak to any of the property law team about Stamp Duty Land Tax Deadline extension, or anything related to this, then please get in touch. Either call on 01323 841481 to arrange an appointment or please fill in the form below and someone will get in touch.
Please note that this article does not constitute legal advice. You should always speak to a legal professional to discuss your circumstances and consider your options.