Stamp duty holiday is good news for the housing market
Chancellor Rishi Sunak’s announcement of a temporary cut to Stamp Duty Land Tax (SDLT) looks set to benefit all property buyers, not just those buying properties worth less than £500,000. But the measure seems to offer no respite in relation to the 3% additional rate payable by those also owning other properties – that additional tax will still apply as normal.
From today until 31 March 2021, the Nil Rate Band of residential SDLT in England and Northern Ireland, will increase from £125,000 to £500,000. This will cut the tax due for everyone who would have paid SDLT.
For those buying residential property worth less than £500,000, their SDLT will be wiped out entirely. For those buying residential property at higher values, savings of £15,000 would apply, as SDLT would only bite on the portion of the purchase price over £500,000. This will leave nearly nine out of ten people getting on or moving up the property ladder paying no SDLT at all.
For purchasers buying second homes to whom the additional (3%) rate of SDLT applies, the additional 3% will still apply but they will still effectively benefit from the saving on the normal rate.
The reduced rate will expire on 31 March 2021 so purchasers will need to have completed their purchases by then to be sure of benefitting from the reduction.
The announcement forms part of a package of measures in the Chancellor’s Summer Statement, designed to help rebuild the economy in the wake of the coronavirus pandemic.
For advice on SDLT please click here to visit our SDLT page
About the author
Linda Adelson is Rosetta Tax’s resident VAT expert, who has specialised in all aspects of VAT and indirect tax for over 25 years. One of just a handful of VAT solicitors in the UK, Linda is ranked by the Legal 500 as a Leading Individual for the depth of expertise in her field.
Find out more about Linda and our VAT advice and consultancy services for businesses.
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