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Chancellor's SDLT Boost For UK Property Investors

It's a stamp duty holiday ...

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Posted by Helen Beaumont on 15/07/2020 @ 8:00AM

The UK housing market has virtually shut down during the Coronavirus lockdown and this has, in turn, affected the rest of the economy so it's no surprise the Government has stepped in and announced this SDLT threshold increase ...

The Stamp Duty Land Tax threshold has been raised significantly until the 31st March 2021!

The Stamp Duty Land Tax threshold has been raised significantly until the 31st March 2021!

copyright: hofmeester / 123rf

Reports show that house prices have dropped slightly, so it was not much of a surprise that Chancellor Rishi Sunak announced a significant increase in the Stamp Duty Land Tax threshold in an effort to kickstart the housing market again.

"It has now been increased to £500,000 from now until the 31st March 2021!"

This means that up to 90% of house buyers will save, on average, around £4,500. Second homeowners and property investors can qualify for the SDLT holiday, though they will still need to pay the current 3% surcharge.

SDLT is calculated on a sliding scale so there will be savings on most property transaction during the holiday period. The new thresholds are as follows:

  • No stamp duty to £500,000

  • 5% from £500,001 to £925,000

  • 10% on £925,001 to £1.5m

  • 12% on any value above £1.5m

As an example, if a first-time buyer buys a house for £795,000, under the new rules, he only pays SDLT on £295,000 at 5% as the first £500,000 is free of SDLT. This means that the total liability would be £14,750. Before the rise in the threshold, it would have been £24,750 as the 5% would have been applied above the existing £300,000 threshold.

If it had not been a first time purchase, SDLT would have been applied at 2% from £125,001 to £250,000 and 5% from £250,001 up to the £795,000 cost of the property. This would have given a total liability of £29,750 whereas now, the new rules mean a saving of £15,000.

"There are some significant savings to be made!"

It is very understandable that the Chancellor wants to get the housing market moving again because of its effect on the rest of the economy. Now, really is a great time to get that house purchase underway so you can save on your Stamp Duty Land Tax liability.

Remember, that transactions must be fully completed before the 31st March 2021.

Until next time ...



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About Helen Beaumont ...


Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.

Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.

When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.