Chancellor Rishi Sunak has announced in his mini budget that from 8 July 2020 until 31 March 2021 HMRC will offer house buyers a temporary Stamp Duty Land Tax (SDLT) holiday.
What is SDLT?
Stamp Duty Land Tax is a tax levied on property transactions in England. There are alternative structures in Wales and Northern Ireland. The incentive is applicable to property transactions in only England and Northern Ireland.
When property is purchased for £125,000.00 or more SDLT is currently levied at the following rates on the relevant portion of the purchase price:
If you are purchasing a ‘second’ property, a further 3% liability is levied on the entire price paid.
What can I save?
As long as you complete your purchase between now and 31 March 2021, you will not be required to pay the SDLT liability on the portion of the purchase price up to £500,000.00.
If you are purchasing a ‘second’ property whilst you will not be required to pay the usual liability, you will still be required to pay the 3% higher liability, whilst otherwise benefitting from the temporary SDLT holiday.
The Chancellor states that the average SDLT bill will fall by £4,500.00 and nearly nine out of ten people buying a main home this year will pay no SDLT at all.
If you are considering purchasing a property in light of this incentive, we recommend starting the process as soon as you are able to ensure that you can secure completion before 31 March 2021. We estimate that transactions usually take anywhere between four and twelve weeks from the time the purchaser’s solicitor receives the contract pack from the seller’s solicitor. The estimated time frame depends upon various factors including the nature of the property and the ‘chain’ of property transactions you may find yourself in.
More informationIf you wish to discuss costs or the process involved in a property transaction do contact us and we will be pleased to provide you with a breakdown of estimated costs and to discuss the process with you. You can email us at email@example.com or contact us on 01708 229444 (Upminster Office), 01277 211755 (Brentwood Office) or 01708 511000 (Hornchurch Office).
Please note that should you require specific tax advice you should contact a specialist tax adviser who will be able to give you detailed advice on this including matters such as exemptions and allowances which may be available to you.
This article was written by Anica Holderness, Associate in the Residential Property team at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of July 2020.