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SDLT holiday for residential purchases

Caroline Fleet, Partner, Corporate Tax
08/07/2020
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The Chancellor announced as part of his summer Statement, a Stamp Duty Land Tax (SDLT) holiday in respect of the first £500,000 for residential properties purchased between 8 July 2020 and 31 March 2021. This holiday revises the existing SDLT bands for the normal rates of SDLT, the lease provisions and also for the higher rates of SDLT (3% surcharge), as set out below.

Normal rates of SDLT


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%  

 

Higher rates for additional properties


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


Net present value of any rent 
SDLT rate  
  Up to £500,000  Zero  

Over £500,000 1%   
 

In most cases, the trigger/effective date for SDLT will be the completion date of the property acquisition. Although this can be varied if occupation or significant consideration has been paid. For transactions after this date, the existing rates will be reinstated.  

This holiday is available to all purchasers of residential property, including companies, and will be seen as a key boost to opening back up the residential market. For residential purchases before 31 March 2021, this will mean a saving of up to £15,000. With a cliff edge date of 31 March 2021 expected to see more activity immediately prior to this period. The remaining question will be whether a holiday of eight months will be sufficient to improve the long term residential market. Many within the property sector have been campaigning for reducing the rates as well as the complexity of this tax on a permanent basis, but this holiday is a step in the right direction.   

For more information on how this might affect you, contact Caroline Fleet or your usual Crowe contact.

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Caroline Fleet
Caroline Fleet
Partner, Tax
London