On 03 March 2021 the chancellor, Rishi Sunak, announced that the temporary holiday on stamp duty land tax (SDLT) payable will be extended.
Initially on 08 July 2020 the chancellor announced a temporary holiday on SDLT payable on the first £500,000 of property purchases in England. The holiday came into immediate effect. The intended aim of this holiday was to boost the property market after flagging over the first lockdown of the coronavirus pandemic.
The temporary holiday on SDLT payable has now been extended for a further three months until 30 June for purchases up to £500,000.
In addition, the temporary holiday on SDLT payable has now been extended for a further six months until 30 September for purchases up to £250,000.
SDLT is a form of tax paid by buyers upon the purchase of property. The amount of stamp duty payable varies according to the price paid for a property.
Prior to 08 July 2020, the various levels of SDLT looked like this:-
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| Property value | SDLT rate |
|---|---|
| Up to £125,000 | Zero |
| The next £125,000 (the portion from £125,001 to £250,000) | 2% |
| 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% |
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Until 30 June 2021 the following rates will apply:-
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| Property value | SDLT rate |
|---|---|
| Up to £500,000 | Zero |
| 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% |
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Between 01 July 2021 and 30 September 2021 the following rates will apply:-
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| Property value | SDLT rate |
|---|---|
| Up to £250,000 | Zero |
| 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% |
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Matt Collis, one of our residential property solicitors, is positive about the extension:-
“The extension of the temporary holiday is a relief for those currently in the process of purchasing a property. It allows extra time for their purchases to complete whilst still being able to benefit from the savings in SDLT payable – which for some transactions can be thousands of pounds. The temporary holiday has certainly helped the property market bounce back after the effects of the coronavirus.”
The Chancellor also confirmed a new scheme to provide mortgages to homebuyers who put forward only a 5% deposit, with a government guarantee.
For any questions relating to residential property sales or SDLT, contact Matt Collis or one of the residential property team on 01258 459361.
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