The announcement by the Chancellor of the temporary holiday on Stamp Duty Land Tax (SDLT) brought good news to many home buyers in England and Northern Ireland. With immediate effect the SDLT threshold has been temporarily raised on the first £500,000 of all property sales in England and Northern Ireland until 31 March 2021.
As they say “the devil is in the detail” and with SDLT changes frequently made without any warning to property lawyers, we have been inundated with enquiries from clients seeking confirmation of the good news. We are pleased to see HMRC has its online SDLT calculator up and running this morning which will benefit us with our maths and recalculations of SDLT!
We have already been able to confirm some SDLT savings with clients which will doubtless bring a smile to their faces. What does that look like in money terms?
A client buying house at £715,500 was going to pay SDLT at £25,775 and now only has a liability of £10,775.
Another buying a second property in London for £1,325,000 was going to pay SDLT of £116,000 and now has a reduced liability £101,000. Although the client has the benefit for a reduction the additional 3% surcharge on buying additional residential property still applies.
So, if you are completing your purchase of your main residence between 8 July 2020 and 31 March 2021, and the price of your property is £500,000 or less, you can enjoy the benefit of not paying any SDLT on your property purchase. If you are buying a property with a price of more than £500,000, you may also benefit from a reduction in SDLT and may save from as much as £15,000.
The coronavirus lockdown hit the property market hard with it being practically impossible to move home during part of the lockdown period. As restrictions are beginning to be lifted there has been a flurry of sales and purchases being agreed no doubt some of these resulting from people spending too much time at home who now find their property is too small, too large or not where they want to live anymore. With many of us still working from home and being able to do so successfully, will there be a surge of people moving further away from our cities as their need to commute to their office reduces?
SDLT is no different to any tax and specialist advice should be obtained as your own personal circumstances may have an impact on how the SDLT is calculated. There are still certain SDLT reliefs available in certain circumstances.
For more information on the potential impact of the stamp duty changes, or if you would like to discuss a property sale or purchase, please contact Jayne Kemsley or another member of Thrings’ Residential Property team.
