In an attempt to boost the UK property market, the chancellor has announced a temporary cut to SDLT rates (stamp duty) for residential property, which will apply immediately until 31 March 2021.
The effect of the changes are that:
- First time buyers and purchasers who do not own additional properties, will not pay SDLT on residential properties valued at £500,000 or below
- For purchasers who own additional properties and are not replacing their main home, the 3% threshold has been extended to £500,000
- Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge
- The nil rate band which applies to the ‘net present value’ of any rents payable for residential property leases is also increased to £500,000 from 8 July 2020 until 31 March 2021
- On the 1 April 2021 the reduced rates will revert to the rates of SDLT that were in place prior to 8 July 2020.
Example based on purchase of a property costing £500,000
- For standard rate transactions, the SDLT will be reduced from £15,000 to Nil
- For First-Time Buyers, the SDLT will be reduced from £10,000 to Nil.
- For purchasers to whom the 3% surcharge applies, the SDLT will be reduced from £30,000 to £15,000
As always, the details will be clarified later.