Stamp Duty Land Tax Holiday Extension: What does it mean for me?

March 9, 2021 10:51 am - Categorised in: ,

Rob Meredith - Director

Property Solicitor Robert Meredith is Head of Residential Conveyancing at Ellis-Fermor & Negus

Last year, the UK government launched a temporary ‘Stamp Duty Land Tax Holiday’ on house purchases up to £500,000 in England and Northern Ireland. Last week the UK Chancellor announced that this ‘holiday’ will be extended for a period of 3 months until 30th June 2021.

After this date, the starting rate of Stamp Duty Land Tax (SDLT) will be £250,000 until the end of September 2021.  The measures aim to help buyers who may have struggled financially because of the coronavirus crisis and to help boost the Property market overall.

Stamp Duty Land Tax (SDLT) is a tax you need to pay when buying Property and varies depending on where you live in the UK.

Our Property Solicitor and Head of Residential Conveyancing at Ellis-Fermor & Negus, Robert Meredith, explains what the extension means for house buyers:

Who pays SDLT?

“Before last year’s announcement, in England and Northern Ireland anyone buying Property for more than £125,000 needed to pay SDLT (although anyone buying in the name of a company or buying a second home or investment property needed to pay a higher rate of SDLT below £125,000 as well). In 2016 the UK government announced SDLT relief for first-time buyers for properties up to the value of £300,000 in order to help people get onto the property ladder.”

What do the new measures mean for me?

“The extension to the SDLT ‘holiday’ means that if you buy Property worth anywhere up to the £500,000 threshold you may not need to pay any SDLT as long as the process is completed before 30th June 2021. This will be good news to anyone in the process of buying a property up to £500,000 but who wouldn’t have completed the purchase by the original March 2021 deadline. However, it is important to bear in mind that if you are a company or if you are buying a second home or investment property there may still be some higher rate SDLT to pay.”

Completion is when the purchase money from the buyer is sent to the seller’s solicitors. Once they have received the money you will be able to collect the keys and the property is yours.

How much could I save?

“Home buyers could save an average of £4,500 under these extended measures and some could even save up to £15,000, as, the higher the price of the house, the more you will save by not paying SDLT. Anyone buying over £500,000 may also have less SDLT to pay overall. However we would advise that anyone looking to make the most of the extended SDLT holiday still has the amount of payable tax saved up, just in case the purchase does not complete by 30th June 2021 and SDLT needs to be paid.”

New rates of SDLT for non-UK residents from 1st April 2021

“Another less well known change to the SDLT rules sees the introduction of new rates of SDLT for anyone buying residential property in England and Northern Ireland who is not residing in the UK where completion takes place on or after 1st April 2021. The new rates will be 2% points higher than those that apply to the same purchases made by UK residents, and will apply to purchases of both freehold and leasehold property. Non-UK residents will also pay increased SDLT on rents on the grant of a new lease.

It is important to note that you will be treated as a non-UK resident for SDLT if you are not present in the UK for 183 days or more in the 12 months before the completion date of the purchase. Trusts and companies have different residency rules.”

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About Robert Meredith

Rob is a Director and Head of our Residential Conveyancing Department and has over 12 years’ experience in Residential Conveyancing work. Rob has been working in the area since he qualified and has helped thousands of families and individuals with their property needs. Rob qualified as a Solicitor in September 2006, having originally been born…

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