On the 3 March 2021, Chancellor Rishi Sunak announced that the Stamp Duty Land Tax (SDLT) holiday will be extended until the 30 June 2021. This was announced in Rishi Sunak’s Budget delivery, amid an attempt to mitigate the impact of the latest coronavirus lockdown.
SDLT is a form of tax payable when you buy a property or land over a certain price in England and Northern Ireland. Examples of where SDLT may be payable are: when you buy a freehold property, a new or existing leasehold, a property through a shared ownership scheme or where you are transferred land or property in exchange for payment.
On the 8 July 2020, the SDLT holiday was introduced. This meant that buyers were not permitted to pay SDLT, unless the purchase price exceeded £500,000. The SDLT holiday was due to expire on the 31 March 2021. However, Rishi Sunak extended this until the 30 June 2021, coming as a significant relief to buyers, hoping to take advantage of the SDLT holiday.
SDLT for Residential Property Explained
The initial threshold is where SDLT starts to apply. If you purchase a residential property for under £500,000 before the 30 June 2021 deadline, there will be no SDLT to pay.
On purchases over the £500,000 threshold, buyers will pay 5% SDLT on the portion from £500,001 to £925,000. Buyers shall pay 10% SDLT on the portion from £925,001 to £1,500,000, and 12% SDLT on any portion over £1,500,000.
| 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 £1,500,000) | 10% |
| The remaining amount (the portion above £1,500,000) | 12% |
From 1 July 2021, if you purchase a residential property for under £250,000, there shall be no SDLT payable. However, from the 1 October 2021, no SDLT will be payable if you purchase a residential property under £150,000.
SDLT for non-residential property and land
If you purchase non-residential property or land for under £150,000 before the 30 June deadline, there will be no SDLT to pay. Non-residential property includes commercial properties, properties that are not suitable to live in, forests, agricultural land or 6 or more residential properties bought in a single transaction.
On purchases over the £150,000 threshold, buyers will pay 2% SDLT on the portion from £150,001 to £250,000. Buyers shall pay 5% on any portion over £250,000.
| Property or lease premium or transfer value | SDLT Rate |
| Up to £150,000 | Zero |
| The next £100,000 (the portion from £150,001 to £250,000) | 2% |
| The remaining amount (the portion above £250,000) | 5% |
From 1 July 2021, if you purchase a non-residential property or land for under £150,000, there shall be no SDLT payable. From the 1 October 2021, the position does not alter and you will not be required to pay SDLT if your purchase does not exceed £150,000.
First-time buyers
From 1 July 2021, a discounted relief will apply that means first time buyers will pay less or no tax if both of the following apply:
- You, and anyone else you are buying with, are first-time buyers; and
- The purchase price is £500,000 or less.
This relief will also be available to individuals that bought their first home before 8 July 2020.
Audley Chaucer can assist in your property transaction. If you desire further information on SDLT or any other legal matter, please contact John Szepietowski or Kay Stewart at Audley Chaucer Solicitors | 01372 303444 | email admin@audleychaucer.com |Linkedin page |
Joseph Beams
