What will happen when the Stamp Duty Holiday ends on June 30 2021?
Caz Blake-Symes • May 11, 2021
Residential property rates
A buyer will usually pay Stamp Duty Land Tax (SDLT) on increasing portions of the property price when buying a residential property, for example a house or flat. SDLT only applies to properties over a certain value.
The amount that is paid depends on:
- when the property was bought
- how much the buyer paid for it
As a rule a buyer must send an SDLT return if you pay morea than £40,000 for a property - even if there’s no SDLT due. There are some exemptions.
Rates from 8 July 2020 to 30 June 2021
- 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%
Example
In March 2021 you buy a house for £625,000. The SDLT you owe will be calculated as follows:
- 0% on the first £500,000 = £0
- 5% on the remaining £125,000 = £6,250
- total SDLT = £6,250
Rates from 1 July 2021 to 30 September 2021
- 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%
Example
In August 2021 you buy a house for £275,000. The SDLT you owe will be calculated as follows:
- 0% on the first £250,000 = £0
- 5% on the remaining £25,000 = £1,250
- total SDLT = £1,250
Rates from 1 October 2021
These rates also apply if you bought a property before 8 July 2020.
- 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%
Example
In October 2021
you buy a house for £295,000. The SDLT you owe will be calculated as follows:
- 0% on the first £125,000 = £0
- 2% on the next £125,000 = £2,500
- 5% on the final £45,000 = £2,250
- total SDLT = £4,750
If you are buying your first home
A First-time Buyer can claim a discount (relief) if you buy your first home before 8 July 2020 or from 1 July 2021.
This means you’ll pay:
- no SDLT up to £300,000
- 5% SDLT on the portion from £300,001 to £500,000
You are eligible if you and anyone else you’re buying with are first-time buyers.
If the price is over £500,000, you follow the rules for people who have bought a home before.
New leasehold sales and transfers
When buying a new residential leasehold property you pay SDLT on the purchase price of the lease (the ‘lease premium’) using the rates above. If the total rent over the life of the lease (known as the ‘net present value’) is more than the SDLT threshold), the buyer will pay SDLT at 1% on the portion of net present value over:
- £500,000 for purchases from 8 July 2020 to 30 June 2021
- £250,000 for purchases from 1 July 2021 to 30 September 2021
- £125,000 for purchases from 1 October 2021
This does not apply to existing (‘assigned’) leases.
For more information about new leases, please visit www.gov.uk/guidance/stamp-duty-land-tax-leasehold-purchases#new-leases
The buyer will usually have to pay 3% on top of SDLT rates if buying a new residential property means you’ll own more than one.
Rates for non-UK residents
Due to the possible complexities o this situation please take legal advice at the earliest opportunity.
We would always recommend that if you have any specific queries , please discuss them with your Solicitor/Conveyancer at the earliest opportunity.
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