In his recent Summer Statement, the Chancellor announced reductions in Stamp Duty Land Tax (SDLT) payable on the purchase of residential properties.

The housing market has been severely affected by the pandemic, with activity and construction both slowing sharply. Moving to a new house also has a multiplier effect on the economy as people tend to spend money decorating and furnishing their new home, with estimates suggesting that doing so drives additional spending worth about 5% of the house value.

Therefore, it is crucial to ensure medium-term confidence in the property market and maintain the growing momentum since the easing of lockdown. To do this, the Government has temporarily cut Stamp Duty Land Tax for home buyers across England & Northern Ireland until 31st March 2021.

The Nil Rate Band of Residential SDLT, in England & Northern Ireland, has been increased from £125,000 to £500,000 for property transactions completed between 8th July 2020 and 31st March 2021. The change means no SDLT will be paid on 90% of property purchases saving £5,000 on the purchase of a £300,000 house. The new rates are as follows:

Property or lease premium or transfer valueSDLT rate
Up to £500,000Zero
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%

Please note the 3% supplementary charge for second and subsequent homes in England and Northern Ireland will continue to apply so the 3% rate would apply up to £500,000 purchase price. The new rates for 2nd or additional properties and those purchased by companies are as follows:

Property or lease premium or transfer valueSDLT rate
Up to £500,0003%
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%

Note: there are different rates of tax on property transactions in Scotland and Wales as such taxes have been devolved in those countries.

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