Summer Budget 2020 – A temporary SDLT reduction

In his Summer economic update, as part of the ongoing government support during the COVID-19 crisis, the Chancellor announced a temporary reduction to Stamp Duty Land Tax (SDLT) on residential property in England and Northern Ireland.

The measure is aimed to generate confidence in the housing market in the medium term and applies from 8 July 2020 until 31 March 2021.

  • The current Residential SDLT threshold of £125,000 will rise to £500,000. This means that taxpayers who do not already own a residential property will pay no SDLT if they purchase a house for £500,000 or less.
  • The residential property Higher Rate of SDLT will be reduced to 3% for buyers of second properties costing up between £125,001 and £500,000.
  • The higher rate applies to residential property purchased by companies as well as individuals.
  • These changes only apply to dwellings purchased in England and Northern Ireland. Scotland has Land and Buildings Transaction Tax (LBTT) and Wales the Land Transaction Tax (LTT); their own taxes on the purchase of land and buildings and SDLT does not apply.

New SDLT Residential Property rates

From 8 July 2020 to 31 March 2021

Band: market price

£

Basic SDLT rate Higher SDLT rate First Time Buyer

Up to 500,000

0% 3% 0%

500,001 – 925,000

5% 8% 5%

925,001 – 1,500,000

10% 13% 10%

1,500,001 and over

12% 15% 12%

 

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