Stamp Duty Land Tax Holiday

1. First-time buyers will be exempt from SDLT if they are purchasing a property for £500,000 or less (pre-holiday first-time buyers did not pay any stamp duty up to £300,000). 

 

2. Second home buyers will continue to be subject to the 3% additional charge but can also benefit from a reduced SDLT. 

 

3. Companies buying a residential property for £500,000 or less will also benefit from these changes although will still be subject to the 3% additional charge. 

 

4. From 1 April 2021, the holiday period will no longer apply, and the standard rates will revert for residential transactions. 

 

If you are considering purchasing an additional property, please note that the SDLT holiday will not remove the 3% additional charge, but will be applied to the temporary threshold of £500,000 until 31 March 2021 (compared to the pre-holiday rates up to £125,000 - 3%, from £125,001 to £250,000 - 5%, from £250,001 to £925,000 - 8%). 

 

The 3% additional charge will apply if: 

 

1. the chargeable consideration for the transaction is £40,000 or more. 

 

2. the purchaser has a major interest in a dwelling other than the purchased dwelling. 

 

• you are liable for the 3% additional stamp duty even if the only other property you own is abroad. 

 

• if anyone buying a property owns another property, the stamp duty additional rate will be due unless they are replacing their main residence. 

 

3. the purchased dwelling is not a replacement for the purchaser’s only or main residence. 

 

Tax Tips: 

 

1. SDLT on main residence and investment property 

 

• If you have sold your main residence and are considering purchasing a new main residence plus an investment property, you won’t pay the stamp duty additional charge if you purchase the investment property first whilst you don’t own any other property. 

 

• If the new main residence is purchased within three years of the sale of the old main residence, the main residence exception will apply, so the extra 3% SDLT will not be due because the investment property was not bought with the intention of being the purchaser’s only or main residence. 

 

• If each property is worth £500,000 or less, no SDLT will be due for either transaction if completed by 31 March 2021 and the above conditions are satisfied. 

 

2. How do I claim a stamp duty refund? 

 

You can apply for a repayment of the additional 3% stamp duty if you’ve sold what was previously your main home. You must have sold your previous main residence within three years of buying the new property to qualify for a refund unless exceptional circumstances apply such as the impact of Covid-19. You can apply for a repayment online on the HMRC website. 

 

If you have any questions regarding Stamp Duty Land Tax Holiday, please get in touch with a member of our team to see how we can help you by calling 0333 772 7753 or email [email protected]