Barrett & Co welcome the SDLT cut announced by the Chancellor which, it is hoped, will help stimulate the housing market.
On Wednesday 8 July 2020 the Government announced reduced rates of Stamp Duty Land Tax (SDLT) payable on residential properties.
If the purchase of a residential property completes on or after 8 July 2020 (until the measure comes to an end on 31 March 2021) SDLT is only payable on any amount paid for the property above £500,000.
The fact that SDLT band rates for the part of the purchase price above £500,000 have been left unchanged (5% for the portion from £500,001 to £925,000, 10% for the portion from £925,001 to £1.5 million etc) may lead people to think that the ‘holiday’ given by the Government is of little benefit to the buyers of larger/more expensive properties. This is however not the case:
The SDLT saving produced by the ‘holiday’ for people buying properties up to the value of £500,000 is a maximum of £15,000 (basically the SDLT which would have been payable on the purchase under the old rules). The same saving is however also achieved by people buying larger/more expensive properties (in fact, unlike people buying properties for less than £500,000, they get the full, maximum saving on their purchase).
For example on an £800,000 purchase, where under the old rates the SDLT payable would have been £30,000, with the ‘holiday’ the SDLT payable will be £15,000 (ie 5% on the portion from 500,001 to £800,000) a saving of £15,000. The same applies to any purchase for over £500,000.
The 3% higher rate for purchases of additional dwellings will still apply throughout the ‘holiday period’ but, again, the saving to people buying additional dwellings is the same as the saving to people buying their only dwelling (as the 3% extra charge would have been payable in any event).
The only parties excluded from the Governments largesse, for now at least, are limited companies buying residential properties with a value over £500,000, in relation to which, unless the conditions for relief are met, the flat rate of 15% will continue to apply.
Anyone looking to buy or sell a property should get in touch with the Conveyancing Department at Barrett & Co (email: [email protected] ; tel 0118 958 9711) for a quote on fees.