Stamp Duty Land Tax “holiday”
I’m certain you will have heard all the buzz around the new help and support that the Government announced in the mini-budget last week.
You are no doubt eager to find out if any of this will apply to you so I’m here to give you the key facts that have been made thus far.
The chancellor announced that Stamp Duty will not apply to main residences which have a value of up to £500,000. Prior to this announcement, SDLT was payable on any value over £125,000, or £300,000 if this was a first-time buyer purchase.
But what does this mean for Landlords, if this has been specifically mentioned for main residence properties?
You will be pleased to hear that buy to lets and second homes are also eligible for the saving, however, the 3% additional SDLT remains payable at the same rates as they always have been following the same rules and guidelines.
A small amount of guidance has been published at this point.
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%
If you have your property portfolio trading as a Limited company, you can also benefit from the increase, as will companies that purchase a residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge.
Be mindful that there has been no change with the filing deadlines for submitting SDLT paperwork, and any purchases under the £125,000 still require there to be a return filed to HMRC.
At present, it appears that if you have exchanged contracts, but not yet completed up to the date of 8th July, then you are able to claim this relief and the purchase will only be subject to stamp duty at a rate of 3% on values up to £500,000.
Unfortunately, if you completed contracts prior to the 8th July then you have missed out on the relief. There is currently no recourse to claim this back, even if you were only a couple of days out.
This is only a temporary free and on 1st April 2021 rates will be returned to the original applicable rates.
Book a discovery call in with me and let’s find out if I can help you put a plan in place to take advantage of the current help that’s out there!
Contact details:
Mellissa Dean FCCA (Director)
M: 07740293463
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