Stamp Duty | NEWS | Mortgage advice & guidence

Breaking News*** Stamp Duty threshold raised to £500k with immediate effect.

Stamp Duty threshold raised to £500k with immediate effect.

This means no stamp duty due on purchases up to £500k or if the purchase is for more than £500k, stamp duty will only be due on the amount over and above £500k.

This is a temporary change and will last until 31st March 2021.

 

Residential Rates on purchases from 8 July 2020 to 31 March 2021

If you purchase a residential property between 8 July 2020 to 31 March 2021, you only start to pay SDLT on the amount that you pay for the property above £500,000. These rates apply whether you are buying your first home or have owned property before.

You can use the table to work out the SDLT due:

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%

From 8 July 2020 to 31 March 2021 the special rules for first time buyers are replaced by the reduced rates set out above.

Higher rates for additional properties

The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.

The following rates apply:

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%

New leasehold sales and transfers

The nil rate band which applies to the ‘net present value’ of any rents payable for residential property is also increased to £500,000 from 8 July 2020 until 31 March 2021.

The following rates will apply:

Net Present Value of any Rent SDLT rate
Up to £500,000 Zero
Over £500,000 1%

Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge.

On the 1 April 2021 the reduced rates shown in the above tables will revert to the rates of SDLT that were in place prior to 8 July 2020.

If you need help to arrange a mortgage, get in touch today for an informal chat!