New Stamp Duty Rates (SDLT) 08.07.2020 – 31.03.2021

Please see the guidance below in respect of the new stamp duty rates until 31st March 2021.

PLEASE NOTE:

  • The period up to the 31.03.2021 will become extremely stressful for all concerned as many people will be pushing for completion in the final week to try to avoid missing out on the SDLT concession.
    • Try to avoid completing during the week 26-31.03.2021.
    • We will do our best to liaise with the others involved to mitigate any hurdles but the speed of the transaction is out of our control and we cannot guarantee that transactions will complete before 31.03.2021. This is especially the case where the transaction forms part of a chain.
    • Solicitors & Licensed Conveyancers are often the last link in the move. It is only when the Solicitor or Licensed Conveyancer  has all the pieces, which is dependent on others, that buyers and sellers can move.
    • Contracts may need to be amended to take any SDLT concession related issues into account.
      • What happens if some people in the chain still wish to proceed even if they complete after the 31.03.2021 and some don’t.
      • Consideration needs to be given to compensation payments which may include unanticipated SDLT, if completion does not take place when expected or at all.
      • Please ensure you are aware of any conditions your lender may have imposed in relation to the SDLT concession.
      • Evidence of funds to cover SDLT after the concession period may be required if the completion date is close to 31.03.2021.

 

Residential Stamp Duty (SDLT) rates on purchases from 8 July 2020 to 31 March 2021

If you purchase a residential property between 8 July 2020 to 31 March 2021, you will only pay SDLT on the amount above £500,000.

These rates apply whether you are buying your first home or have owned property before.

You can use the table to work out the SDLT due:

 

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%

 

From 8 July 2020 to 31 March 2021 the special rules for first time buyers are replaced by the reduced rates set out above.

Use the SDLT calculator to work out how much tax you’ll pay.

 

Higher Stamp Duty rates (SDLT) for additional properties

The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.

The following rates apply:

 

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%

 

New leasehold sales and transfers

The nil rate band which applies to the ‘net present value’ of any rents payable for residential property is also increased to £500,000 from 8 July 2020 until 31 March 2021.

The following rates will apply:

Net Present Value of any RentSDLT rate
Up to £500,000Zero
Over £500,0001%

 

  • Companies buying residential property worth less than £500,000 will also benefit from these changes.
  • It is also worth noting that companies buying residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge.

 

On the 1 April 2021 the reduced rates shown in the above tables will revert to the rates of SDLT that were in place prior to 8 July 2020.

You can speak to our Property Law Team by phoning 01535 662644.