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The next SDLT deadline is looming!

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The SDLT Holiday explained:

Stamp Duty Land Tax (SDLT) is a tax that must be paid if you buy a property or land over a certain price in England and Northern Ireland.

From 8 July 2020 reduced rates of SDLT, known as the ‘SDLT Holiday’, were introduced as a means of stimulating the property market during the pandemic. The holiday applies to all residential property transactions, whether taxable at standard rates or at higher rates, as a long as completion occurs within the holiday deadline. Rather than ending on 31 March 2021 as initially stipulated, the Government took into account the representations received and the temporary holiday of reduced rates was extended to the 30 June 2021.

Changes to the threshold

The nil rate band is the threshold above which tax is payable. If you buy a property for less than the threshold, there is no SDLT to pay.

After 1 July 2021 the nil rate band will gradually taper down to the pre-holiday threshold.

  • From 8 July 2020 – 30 June 2021, the temporary nil rate band is £500,000.
  • From 1 July 2021 – 30 September 2021, the nil rate band will be £250,000.
  • From 1 October 2021, onwards the nil rate band will return to the standard amount of £125,000.

First time buyers (FTB)

FTB relief has not applied during the SDLT holiday as the reduced holiday rates are more generous than the rates where FTB relief applied.

After 30 June 2021 FTB relief will return, with a SDLT nil rate band for up to £300,000 of the purchase price. SDLT for FTB will be payable at 5% for the amount over £300,000 up to £500,000, and above £500,000 there is no FTB relief available.

Calculating SDLT

SDLT is charged as a percentage on the purchase of residential property using a “slice” system. The relevant rate applies to the proportion of the consideration that falls within that purchase price band.

From 8 July 2020 to 30 June 2021 :

Purchase Price

Band

Standard SDLT rate Higher SDLT rate Non-resident

Basic SDLT rate

Non-resident

Higher SDLT rate

Up to £500,000 0% 3% 2% 5%
£500,001 – £925,000 5% 8% 7% 10%
£925,001 – £1,500,000 10% 13% 12% 15%
Over £1,500,000 12% 15% 14% 17%

 

From 1 July 2021 to 30 September 2021:

Purchase Price

Band

Standard SDLT rate Higher SDLT rate Non-Resident
Basic SDLT rate
Non-Resident
Higher SDLT rate
Up to £250,000 0% 3% 2% 5%
£250,001 – £925,000 5% 8% 7% 10%
£925,001 – £1,500,000 10% 13% 12% 15%
Over £1,500,000 12% 15% 14% 17%

 

From 1 October 2021:

Purchase Price

Band

Standard SDLT rate Higher SDLT rate Non-Resident
Basic SDLT rate
Non-Resident
Higher SDLT rate
Up to £125,000 0% 3% 2% 5%
£125,001 – £250,000 2% 5% 4% 7%
£250,001 – £925,000 5% 8% 7% 10%
£925,001 – £1,500,000 10% 13% 12% 15%
Over £1,500,000 12% 15% 14% 17%

 

For legal advice on property transactions, feel free to contact the London Residential Property team on:

020 7583 2222     Email usresiprop.enquiries@roydswithyking.com

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