Stamp Duty Land Tax (SDLT) holiday extended

The current Stamp Duty Land Tax (SDLT) holiday has been extended beyond the original deadline of 31 March 2021 in England and Northern Ireland.

The tax break, introduced in July 2020, has caused a rise in demand of home movers looking to take advantage of the potential savings, which was creating delays in the buying process. The SDLT extension will therefore be a welcome announcement for homebuyers who were unsure if their property purchase would complete before the March deadline.

How much could I save?

The amount you could save depends on the value of your new home. Until 30 June 2021, homebuyers won’t need to pay stamp duty on the first £500,000 of the purchase price of the property.

SDLT rates up until 30 June 2021

Property priceStamp duty rate
Up to £500,0000%
The next £425,000

(the portion between £500,001 and £925,000)

5%
The next £575,000

(the portion between £925,001 and £1.5m)

10%
The remaining amount

(the portion above £1.5m+)

12%

(if you are purchasing a second home or a buy-to-let property, you’ll pay 3% extra on each band)

 

SDLT rates from 1 July 2021 to 30 September 2021

Property priceStamp duty rate
Up to £250,0000%
The next £675,000

(the portion between £250,001 and £925,000)

5%
The next £575,000

(the portion between £925,001 and £1.5m)

10%
The remaining amount

(the portion above £1.5m+)

12%

(if you are purchasing a second home or a buy-to-let property, you’ll pay 3% extra on each band)

 

From 1 October 2021, the original SDLT rates will apply

Property priceStamp duty rate
Up to £125,0000%
The next £125,000

(the portion between £125,000 and £250,000)

2%
The next £675,000

(the portion between £250,001 and £925,000)

5%
The next £575,000

(the portion between £925,001 and £1,500,000)

10%
The remaining amount

(the portion above £1,500,001+)

12%

(if you are purchasing a second home or a buy-to-let property, you’ll pay 3% extra on each band)

 

So, what does this mean in practice?

For example, if you purchase a house for £575,000, you would pay the following SDLT.

If you purchase the property and complete before 30 June 2021, the SDLT you will pay is:

– 0% on the first £500,000 = £0

– 5% on the remaining £75,000 = £3,750

Total SDLT payment of £3,750

If you purchase the property and complete between 1 July 2021 and 30 September 2021, the SDLT you will pay is:

– 0% on the first £250,000 = £0

– 5% on the remaining £325,000 = £16,250

 Total SDLT payment of £16,250

If you purchase the property and complete from 1 October 2021, the SDLT you will pay is:

– 0% on the first £125,000 = £0

– 2% on the next £125,000 = £2,500

– 5% on the next £325,000 = £16,250

Total SDLT payment of £18,750

First time buyer SDLT relief

Currently, first time buyers benefit from the SDLT holiday in the same way as all other homebuyers (as detailed in the tables above).

However, from 30 June 2021, first time buyers in England and Northern Ireland won’t pay stamp duty on the first £300,000 of their main residential property.

From 1 October 2021, SDLT will revert to pre-coronavirus rates, but there will be no change for first time buyers, who will continue to pay no stamp duty on the first £300,000 of a property.

Further information

For advice tailored to your specific needs, or support with stamp duty land tax rates, please speak to your usual PM+M representative, or get in touch with Jonathan Cunningham using the button below.

For more information about anything in the above article, please get in touch using the button below.
Jonathan Cunningham
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