The Stamp Duty (SDLT) ‘Holiday’ Extension

Partner Melanie Verth

On 3rd March 2021 the Chancellor announced an extension to the temporary increase to the nil band rate of Stamp Duty Land Tax (SDLT) payable on Residential Property.

The announcement means that the nil rate band of up to £500,000 will remain effective until 30th June 2021. Thereafter from 1st July 2021 to 30th September 2021 the nil rate band will reduce to £250,000. On 1st October 2021 the nil rate band will return to the standard amount of £125,000.

Illustrations of the effect of the changes

 Rates payable on first home or replacement principal residence

 If you are purchasing your first home or replacing your main residence the following rates will apply:

  1. Rates on purchases until 30th June 2021

SDLT will be payable on the amount that you pay for the property above £500,000. These rates apply whether you are buying your first home or have owned property before.

Property or lease premium or transfer value SDLT rate
Up to £500,000 Nil
The next £425,000 (the portion from £500,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%
  1. Rates on purchases from 1st July 2021 to 30th September 2021

SDLT will be payable on the amount that you pay for the property above £250,000. These rates apply whether you are buying your first home or have owned property before.

Property or lease premium or transfer value SDLT rate
Up to £250,000 Nil
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%

From 1st October 2021 the usual rates of SDLT will be payable with reliefs for First Time Buyers and others if relevant.

Rates payable on second properties and further investment properties

If you are purchasing a second property or further investment property which does NOT replace your main residence the higher SDLT rates will be payable. The 3% higher rate for purchases of additional dwellings applies on top of temporary reduced rates.

  1. Higher Rates from 8th July 2020 to 30th June 2021
Property or lease premium or transfer value SDLT rate
Up to £500,000 3%
The next £425,000 (the portion from £500,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%
  1. Higher Rates from 1st July 2021 to 30th September 2021
Property or lease premium or transfer value SDLT rate
Up to £250,000 3%
The next £675,000 (the portion from £250,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%

On 1st October 2021 the temporary rates of SDLT will revert back to the standard rates that were in place prior to 8th July 2020.

The calculation of SDLT is complex and careful consideration needs to be made regarding the application of rates and reliefs.  For more information on the SDLT holiday read our Important advice for clients hoping to complete before the deadline.

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