Stamp Duty Land Tax holiday announced

Jul 8, 2020

In a speech delivered today, 8 July 2020, the Chancellor Rishi Sunak announced a Stamp Duty Land Tax (SDLT) holiday for residential properties in England and Northern Ireland.

What is Stamp Duty Land Tax?

SDLT is payable on the acquisition on any major interest in land in England and Northern Ireland. Different regimes are in place in Wales (where Land Transaction Tax applies) and Scotland (where the tax levied is Land and Buildings Transaction Tax). Before applying the new SDLT holiday, the way in which SDLT is applied will depend on whether the land is residential, commercial or mixed use, and a 3% surcharge is applied to residential property in the event that the buyer is either a company, or if they already own another residential property. In addition, first-time buyers are eligible for SDLT relief when purchasing their first home for £500,000 or less. For purchases of £300,000 or less no SDLT will be payable, and where the purchase price is between £300,000 and £500,000 the buyer will pay 5% on the amount above £300,000.

How much SDLT will I need to pay on the purchase of a property in England?

The current rates of SDLT are as follows:

Residential

Purchase price bands (£) Percentage rate (%) Percentage rate (%) including the 3% surcharge
Up to 125,000 0 3
Above 125,000 and up to 250,000 2 5
Above 250,000 and up to 925,000 5 8
Above 925,000 and up to 1,500,000 10 13
Above 1,500,000+ 12 15

 

Commercial

Purchase price bands (£) Percentage rate (%)
Up to 150,000 0
Above 150,000 and up to 250,000 2
Above 250,000+ 5

 

What is the SDLT Holiday?

The holiday will apply temporarily for the period from 8 July 2020 to 31 March 2021 on all residential purchases. The holiday is a relief on tax payable on the first £500,000 of the price paid for a residential property. The SDLT holiday will mean that a buyer of property costing up to £500,000 will not be required to pay any SDLT, representing a saving of up to £15,000. This calculation is based on the standard residential rates with no other relief applied and will temporarily replace the first-time buyers’ relief.

What will happen if I spend more than £500,000?

If your purchase is over £500,000 then you will only start to pay SDLT on the amount that you pay for the property above £500,000 (and this will apply to everyone, whether you are a first-time buyer or if you have owned a residential property before). Therefore the residential rates will be as follows during the SDLT holiday:

Purchase price bands (£) Percentage rate (%) Percentage rate (%) including the 3% surcharge
Up to 500,000 0 3%
Above 500,000 and up to 925,000 5 8%
Above 925,000 and up to 1,500,000 10 13%
Above 1,500,000+ 12 15%

 

It should also be noted that the SDLT levied against rent on the grant of new residential leases will benefit from the SDLT holiday. SDLT is payable on the “net present value” (NPV) of rent payable under the lease, and SDLT on the rent NPV of up to £500,000 will be 0%, and for rent on NPV over £500,000 it will be 1%.

Why is this being done now?

The aim of the SDLT holiday is to provide financial relief to buyers to help the property market get back on its feet following the easing of the coronavirus lockdown.

If you require further advice regarding the purchase of land or any other Real Estate matter, please contact us at realestate@herrington-carmichael.com, call 01276 686222 or visit https://www.herrington-carmichael.com/.

This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.

Latest Insights - sign up to our Emailers

Our Emailers will bring you the latest news and insights from our legal teams as we look at the key talking points in life and in law.

Our insights will include articles, podcast discussion and information about our events and services.

You can sign up to as many as you wish and you can opt out at any time.

Sign up to our Emailers






Please see our privacy policy regarding use of your data.


Latest Articles

Top Legal Insights

 

Contract Law

Material Breach of Contract

What is a ‘material’ breach of contract by a party to a commercial contract? This is a critical issue regularly considered by the courts. What constitutes a material breach and what are the remedies?

Property Law

Commercial Lease: The Financial impact on Landlord and Tenant

Coronavirus (COVID-19) and the restrictions now in place to control its spread, are having a significant effect on many business sectors.

Divorce and Family Law

Divorce in Lockdown: Can I get some discreet legal advice?

We have spoken to clients who are unfortunately experiencing some family issues, and would like to obtain expert legal advice, yet don’t know how...

Land & Property Dispute

Restrictive Covenants – The Price of Modification

Having identified that your land is burdened by a restrictive covenant and for the purposes of this article the covenant in question will be that only one residential building can be erected on the land. What do you do next?

Wills, Trusts and Probate

Why is having a will so important?

It is entirely up to you if and when you want to create a Will, but it is important to be aware of the consequences of not having a Will.

Award winning legal advice

Herrington Carmichael offers legal advice to UK and International businesses as well as individuals and families. Rated as a ‘Leading Firm 2024’ by the legal directory Legal 500 and listed in The Times ‘Best Law Firms 2023 & 2024’. Herrington Carmichael has offices in London, Farnborough, Reading, and Ascot.

+44 (0)1276 686 222

Email: info@herrington-carmichael.com

Farnborough
Brennan House, Farnborough Aerospace Centre Business Park, Farnborough, GU14 6XR

Reading (Appointment only)
The Abbey, Abbey Gardens, Abbey Street, Reading RG1 3BA

Ascot (Appointment only)
102, Berkshire House, 39-51 High Street, Ascot, Berkshire SL5 7HY

London (Appointment only)
60 St Martins Lane, Covent Garden, London WC2N 4JS

Privacy Policy   |   Legal Notices, T&Cs, Complaints Resolution   |   Cookies  |   Client Feedback   |  Diversity Data

 

 

Our Services

Corporate Lawyers
Commercial Lawyers
Commercial Property Lawyers
Conveyancing Solicitors
Dispute Resolution Lawyers
Divorce & Family Lawyers
Employment Lawyers
Immigration Law Services
Private Wealth & Inheritance Lawyers
Startups & New Business Lawyers

Pay Online >

Please be aware that we have no plans to change our bank details. If you receive any indication that any of our bank details have changed please contact us before sending us any funds. We take no responsibility for monies you transfer into the wrong bank account.

© 2024 Herrington Carmichael LLP. Registered in England and Wales company number OC322293.

Herrington Carmichael LLP is authorised and regulated by the Solicitors Regulation Authority with registration number 446245.