Stamp Duty Land Tax Break

Legal Posted 20/07/20
What is Stamp Duty Land Tax (SDLT)?

SDLT is a tax imposed in England and Northern Ireland by the Government on the purchase of properties. Scotland and Wales also have similar arrangements, writes Urvashi Suddul Trainee Solicitor, Whitehead Monckton.

The main purpose of SDLT is to raise funds for the UK Treasury.

SDLT on purchases

In its simplest terms, residential SDLT rates in England and Northern Ireland are as follows:

  1. 0% is paid for properties purchased for £125,000 or less.
  2. 2% of the purchase price is paid on properties valued between £125,001 and £250,000.
  3. 5% of the purchase price is paid on properties valued between £250,001 and £925,000.
  4. 10% of the purchase price is paid on properties valued between £925,001 and £1,500,000.
  5. 12% of the purchase price is paid on properties valued at more than £1,500,000.

This is a staggered threshold. By way of an example, if a property is purchased for £500,000, the SDLT payable is not 5% of £500,000. Rather the SDLT will be calculated as follows:

0% on the first £125,000 = £0
2% on the next £125,000 = £2,500
5% on the remaining £250,000 = £12,500

Therefore, a total of £15,000 SDLT is payable on a property purchased for £500,000.

SDLT is not as simple as it seems. For example, buyers with multiple properties will pay a different amount of SDLT compared to buyers with only one residential home. Buy to let properties are also subject to varying SDLT thresholds. First time buyers do not pay SDLT on properties up to a value of £300,000. Therefore, professional advice should be sought.

Concessions in light of Covid-19

On 8 July 2020, Chancellor Rishi Sunak announced that a break for SDLT would be implemented with immediate effect to revive the property market. As a result SDLT has been abolished for properties up to the value of £500,000. The break will last until 31 March 2021.

Detailed guidance will follow in due course. It is expected this will explain SDLT thresholds for properties over the value of £500,000.

For advice regarding SDLT, please contact a member of our property team.

Photo: © Thinglass / Shutterstock.com


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