The UK government has introduced temporarily reduced rates on Stamp Duty Land Tax (SDLT), but what does this mean for you?
SDLT applies on the purchase of land or residential property in England or Northern Ireland. Similar taxes apply in Scotland (Land & Buildings Transaction Tax) and Wales (Land Transaction Tax), but the rates and thresholds are set by the Scottish and Welsh Governments.
As well as the reduction in SDLT in England and Northern Ireland, the equivalent taxes in Wales and Scotland have also been reduced temporarily. These reduced rates will be in place until 31 March 2021.
If you are not likely to complete the sale or purchase of a property before 31 March 2021, these short term changes are unlikely to affect you.
If you are purchasing land or property within this time frame, then this is how the taxation will differ for you:
England & Northern Ireland – 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. Transactions involving an additional dwelling will continue to attract a 3% surcharge on the full purchase price.
Scotland – You now only start to pay Land & Buildings Transaction Tax on purchases above £250,000 rather than £145,000. Transactions involving an additional dwelling will continue to attract a 4% surcharge on the full purchase price.
Wales – The starting threshold for Land Transaction Tax will increase from £180,000 to £250,000 for the residential main rates. Transactions involving an additional dwelling will continue to attract a 3% surcharge on the full purchase price.
More information can be found on government websites for each country.