Due to COVID-19 our offices are closed to the public, however we remain fully operational and here to help. Find out more.

Insights

Stamp Duty changes – what you need to know

There was great news for homebuyers in chancellor Rishi Sunak’s ‘Summer Statement’ this week; if you purchase a residential property between 8 July 2020 to 31 March 2021, you only start to pay SDLT on the amount that you pay for the property above £500,000. These rates apply whether you are buying your first home or have owned property before. 

You can use the table to work out the SDLT due, but in simple terms a property worth £400k will now have ZERO stamp duty payable, rather than £10,000 and a property at £500k will also be ZERO, rather than £15k.

If you buy a property for more than £500k then your total stamp duty bill will be reduced by £15k, with no upper limit on the purchase price to benefit from the saving.

From 8 July 2020 to 31 March 2021 the special rules for first time buyers are replaced by the reduced rates set out below:

 

Property or lease premium or transfer 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%

Higher rates for additional properties

The 3% higher rate for purchases of additional dwellings (such as second homes and Buy-to-Lets) applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.  This means that although the 3% surcharge still applies, a discount of up to £15k is available on these purchases too – which include properties purchased by limited companies.

So factoring in the extra 3% the following rates now apply for additional dwellings and limited company purchases:

Property or lease premium or transfer value SDLT rate
Up to £500,000 3%
The next £425,000 (the portion from £500,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%

 

If this has got you thinking then feel free to get in touch – we’d be delighted to help you understand your options.

Loading...