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Stamp Duty Land Tax: Temporary Reduced Rates Until March 31st 2021

Stamp Duty Land Tax - Temporary Reduced Rates Until March 31st 2021

The government has announced that the Stamp Duty threshold has now increased to £500,000 which means if you were to purchase a property for £500,000 or less then you do not have to pay any Stamp Duty from 8th July 2020 until 31st March 2021.

If it is a second home (such as a Buy To Let) you still have to pay the 3% but not the normal Stamp Duty on top of that so there is still a reduction in those circumstances.

Anyone buying a property over £500,000 will only pay 5% on the difference between the price and the £500,000 threshold, for example, someone buying for £600,000 only pays £5000 Stamp Duty instead of £20,000.

You can use the table to work out the Stamp Duty Land Tax due:

Property or lease premium or transfer valueSDLT rate
Up to £500,000Zero
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 valueSDLT rate
Up to £500,0003%
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 RentSDLT rate
Up to £500,000Zero
Over £500,0001%

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% Stamp Duty Land Tax 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.

Source & further information: https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates

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