Info Guide

The stamp duty land tax relief ‘holiday’ unveiled

Chancellor Rishi Sunak has announced in his mini budget that from 8 July 2020 until 31 March 2021 HMRC will offer house buyers a temporary Stamp Duty Land Tax (SDLT) holiday.

 

What is SDLT?
Stamp Duty Land Tax is a tax levied on property transactions in England. There are alternative structures in Wales and Northern Ireland. The incentive is applicable to property transactions in only England and Northern Ireland.

When property is purchased for £125,000.00 or more SDLT is currently levied at the following rates on the relevant portion of the purchase price:

  • £125,001.00 - £250,000.00: 2%
  • £250,001.00 - £925,000.00: 5%
  • £925,001.00 - £1,500,000.00: 10%
  • £1,500,001.00 – upwards: 12%

If you are purchasing a 'second' property, a further 3% liability is levied on the entire price paid.

 

What can I save?
As long as you complete your purchase between now and 31 March 2021, you will not be required to pay the SDLT liability on the portion of the purchase price up to £500,000.00.

If you are purchasing a 'second' property whilst you will not be required to pay the usual liability, you will still be required to pay the 3% higher liability, whilst otherwise benefitting from the temporary SDLT holiday.

The Chancellor states that the average SDLT bill will fall by £4,500.00 and nearly nine out of ten people buying a main home this year will pay no SDLT at all.

 

Time scales
If you are considering purchasing a property in light of this incentive, we recommend starting the process as soon as you are able to ensure that you can secure completion before 31 March 2021. We estimate that transactions usually take anywhere between four and twelve weeks from the time the purchaser's solicitor receives the contract pack from the seller's solicitor. The estimated time frame depends upon various factors including the nature of the property and the 'chain' of property transactions you may find yourself in.

 

More information
If you wish to discuss costs or the process involved in a property transaction do contact us and we will be pleased to provide you with a breakdown of estimated costs and to discuss the process with you. You can email us at info@aschfordslaw.com or contact out office by telephone on 02030029147 (landline) or 075 8293 2830 (mobile).

Please note that should you require specific tax advice you should contact a specialist tax adviser who will be able to give you detailed advice on this including matters such as exemptions and allowances which may be available to you