From 8 July 2020 until 31 March 2021 the UK Government has removed Stamp Duty Land Tax (SDLT) for property purchases up to £500,000. The decision is based on the huge impact that Covid-19 has had on the UK economy. The great news is that these change apply to first time buyers and those you have owned property before.
If you are purchasing a property up to £500,000 there is no SDLT to pay. If you are purchasing a property above £500,000 you only pay SDLT on the amount over £500,000. Check out this grid from the gov.uk to explain further
Property or lease premium or transfer value | SDLT rate |
---|---|
Up to £500,000 | Zero |
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% |
The huge impact I expect the UK Government wish to happen is that the cogs of one of the UK’s most important industries begin to turn again. As the SDLT barrier is removed there should be in theory more purchases as more properties become affordable. This will then have a knock on effect to the industry as a whole as trades can start renovations on new projects, the removal companies have belongings to move, the solicitors have conveyancing to oversee and surveyors have properties to evaluate.
The fantastic news for those involved in property investment is that we have not been forgotten. If you are to purchase a property in a company until 31st March 2021 you can benefit from a reduced SDLT and the table below shows this
Property or lease premium or transfer value | SDLT rate |
---|---|
Up to £500,000 | 3% |
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% |
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