The Chancellor of the Exchequer, Rishi Sunak, has today announced temporary changes to the Stamp Duty Land Tax regime in order to assist buyers in the housing market who complete their property purchase transactions between 8 July 2020 and 31 March 2021.
The Chancellor of the Exchequer, Rishi Sunak, has today announced temporary changes to the Stamp Duty Land Tax (‘SDLT’) regime in order to assist buyers in the housing market who complete their property purchase transactions between 8 July 2020 and 31 March 2021. SDLT is a form of property transaction tax, which is payable to the Government by the purchaser of land and property in England. Different systems apply throughout the rest of the United Kingdom.
The previous threshold above which SDLT would become payable was a purchase price of £125,000. From today, the threshold has been raised to £500,000 for properties in England in order to stimulate increased activity in the housing sector and to boost the supporting industries. The portion (or slab) of the purchase price below £500,000 will not be liable to any SDLT with SDLT rates rising in slabs as the purchase price increases.
The Government has produced the table below as a guide for buyers as to the new rates which will be payable:
|Purchase Price||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%|
The new rates apply regardless of whether you are a first time buyer, or have owned a property before. Purchasers acquiring an additional property (which is not intended to be their main home) will continue to be liable for an additional surcharge of 3% on top of the above rates, being the surcharge which was originally imposed as part of the Chancellor’s Spring Budget back in 2016.
Importantly for the commercial sector, companies buying residential property worth less than £500,000 will also benefit from the new regime, as well as individuals. The Government has a dedicated page relating to Stamp Duty for Shared Ownership properties, which can be accessed here, and referred to for details of any impact that the Chancellor’s announcement may specifically have on this type of property.
Today’s changes are intended to kick-start the housing market following a reported decrease in average house prices since the start of the Covid-19 pandemic. The news has been welcomed by buyers and Estate Agents alike, with many commentators in the media agreeing that the tax cuts could unlock great potential for the housing market as those lockdown restrictions continue to be lifted. These changes are anticipated to encourage people to move home and the increased liquidity may in fact exceed the £12bn (approx.) received by the Chancellor of the Exchequer in the 2018/19 financial year.
For further advice on Stamp Duty, or any other property matters, please do not hesitate to get in touch with one of our Residential Conveyancing experts by emailing.