Stamp Duty Land Tax
Stamp Duty Holiday
In July the government announced they are increasing the threshold at which you start paying Stamp Duty Land Tax (SDLT) from £125,000 to £500,000.
Those people buying a home over the £500,000 limit, will save on the SDLT due up to half a million pounds, but will still have to start paying the duty at 5% for the amount paid above £500,000, rising to 10% and 12% for the most expensive properties.
It is estimated the tax break will cost the Treasury £3.8bn, and is due to last until March 2021.
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Rates from 8 July 2020 to 31 March 2021:
|Purchase Price of Property||Rate of SDLT|
|Up to £500,000||0%|
|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%|
In March 2021 you buy a house for £625,000. The SDLT you owe will be calculated as follows:
– 0% on the first £500,000 = £0
– 5% on the remaining £125,000 = £6,250
– Total SDLT = £6,250
Higher Rates of Stamp Duty Land Tax
Those purchasing a second home whether for personal enjoyment or letting out (long term or holiday) may be subject to increased rates of SLDT (usually 3% above the standard rate for each of the purchase price bands).
If you buy either property or land in the UK you have to pay Stamp Duty Land Tax (SDLT).This is charged on all purchases of houses, flats and other land and buildings.
The SDLT rate depends on:
- The purchase price of the property
- Whether the property is residential
- Whether the property is in a disadvantaged area
- Whether you own another more than one home (3% surcharge)
Stamp Duty Land Tax is normally paid directly to your solicitor with your funds for the purchase of the property.