In his Summer economic update, as part of the ongoing government support during the COVID-19 crisis, the Chancellor announced a temporary reduction to Stamp Duty Land Tax (SDLT) on residential property in England and Northern Ireland.

The measure is aimed to generate confidence in the housing market in the medium term and applies from 8 July 2020 until 31 March 2021.

  • The current Residential SDLT threshold of £125,000 will rise to £500,000. This means that taxpayers who do not already own a residential property will pay no SDLT if they purchase a house for £500,000 or less.
  • The residential property Higher Rate of SDLT will be reduced to 3% for buyers of second properties costing up between £125,001 and £500,000.
  • The higher rate applies to residential property purchases made by companies as well as individuals.
  • The nil rate band applying to the ‘net present value’ of rents payable for residential property is increased to £500,000.
  • These changes only apply to dwellings purchased in England and Northern Ireland. Scotland has Land and Buildings Transaction Tax (LBTT) and Wales the Land Transaction Tax (LTT); their own taxes on the purchase of land and buildings and SDLT does not apply.

New SDLT Residential Property rates

From 8 July 2020 to 31 March 2021

Band: market price

£

Basic SDLT rate Higher SDLT rate First Time Buyer

Up to 500,000

0% 3% 0%

500,001 – 925,000

5% 8% 5%

925,001 – 1,500,000

10% 13% 10%

1,500,001 and over

12% 15% 12%

 

Leasehold interests

The following rates will apply:

Net Present Value of any RentSDLT rate
Up to £500,000 Zero
Over £500,000 1%

 

What were the previous basic and higher rate SDLT bands?

Useful guides

Summer Economic Update: At glance
Chancellor of the Exchequer, Rishi Sunak, made his update on Wednesday 8 July 2020. We outline his new measures designed to assist in reviving jobs and the economy following the outbreak of the Coronavirus.

COVID-19: Government support tracker
This tracker covers measures announced by the government to support individuals and businesses, as we get through COVID-19.

SDLT: Stamp Duty Land Tax
What are the SDLT rates? What is exempt from SDLT? What reliefs are available?

SDLT: First-time buyers' guide to Stamp Duty Land Tax
What Stamp Duty Land Tax (SDLT) relief is available to first-time buyers?

SDLT: Higher rates
Who pays SDLT at higher rates? What reliefs are available?

External links

HMRC Guidance: Stamp Duty Land Tax: Temporary reduced rates

A Plan for Jobs 2020: Policy paper 

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