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Read MorePublished 9th July 2020 by Money Matters Direct
Stamp Duty threshold raised to £500k with immediate effect.
This means no stamp duty due on purchases up to £500k or if the purchase is for more than £500k, stamp duty will only be due on the amount over and above £500k.
This is a temporary change and will last until 31st March 2021.
Residential Rates on purchases from 8 July 2020 to 31 March 2021
If you purchase a residential property between 8 July 2020 to 31 March 2021, you only start to pay SDLT on the amount that you pay for the property above £500,000. These rates apply whether you are buying your first home or have owned property before.
You can use the table to work out the SDLT due:
| 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% |
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 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
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 Rent | SDLT rate |
|---|---|
| Up to £500,000 | Zero |
| Over £500,000 | 1% |
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% SDLT 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.
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