Chancellor’s Summer Statement 2020 – SDLT Update
Today Chancellor Rishi Sunak announced his plan for the second phase of the UK's economic response to the Covid-19 pandemic.
Part of this plan involves a very welcome, temporary cut to stamp duty land tax (“SDLT”) on residential property purchases.
The tax-free nil rate band on residential purchases has been temporarily increased from £125,000 to £500,000. Above £500,000, the standard SDLT rates and thresholds continue to apply. The SDLT ‘slice’ system means that this new measure will help all purchasers – you do not lose the benefit if your purchase price exceeds £500,000 (as is the case with SDLT relief for first time buyers).
The existing 3% second home surcharge will continue to apply, so buyers of second homes will pay SDLT at only 3% up to £500,000.
Overall, the measure will provide an SDLT saving of £15,000 for both standard and additional rate SDLT payers.
For example, a first time buyer of an apartment for £750,000 will pay SDLT of £12,500 instead of £27,500. A second home buyer, also buying for £750,000, would pay SDLT of £35,000 instead of £50,000.
Companies will also benefit from these changes where they are not subject to the flat 15% rate.
The changes will apply to transactions which complete between 8 July 2020 and 31 March 2021 inclusive. SDLT applies to all residential property purchases in England and Northern Ireland.
Please note that the above update is designed as a summary of measures which are of particular interest to us and our clients and is not designed to be a comprehensive list of all the measures to be introduced.
A comment from this article was published in Landlord Today on 9th July 2020.