Typically, when a purchaser buys residential property in England or Northern Island for more than £125,000, they must pay Stamp Duty Land Tax (SDLT). However, from 8 July 2020 to 31 March 2021, this was raised to £500,000 to help boost the property market and therefore the economy throughout the pandemic.
The latest announcement confirmed that this raised threshold would continue until 30 June 2021, then reduce down to £250,000 from 1 July to 30 September 2021. It will then revert back to £125,000 from 1 October 2021 onwards.
What Does The Extended SDLT Holiday Mean?
With the SDLT roadmap announced, if you are in the process of buying a home and complete the deal on or before 30 June 2021, you will not need to pay any SDLT, providing that the purchase price is not over £500,000. This could save you up to £15,000!
It also means that any landlords or companies who buy investment properties to let out will also benefit from the SDLT holiday. However, they will need to pay a surcharge of 3% on the entire value of the deal.
Has The LTT Holiday In Wales Changed?
For those located in Wales, if you purchase a property, you must pay land transaction tax (LTT), which would typically apply to residential property deals above £180,000. Similarly to SDLT, there has also been an LTT holiday in place since 26 July 2020, which meant that the threshold was raised to £250,000. This will again stay the same until 30 June 2021. The only difference is that investors, second home buyers and companies cannot benefit at all from the LTT holiday.
What About Purchasing A Property In Scotland?
There has been an SDLT holiday in Scotland on residential properties purchased between 15 July 2020 and 31 March 2021; this applied to purchase prices that did not exceed £250,000. However, that tax break will not be extended.