The Chancellor’s announcement regarding Stamp Duty Land Tax (SDLT) will provide a welcome boost for home buyers and the housing market more generally.
The Treasury says nine out of 10 people getting on or moving up the property ladder (or downsizing) this year will pay no stamp duty as a result.
The effect of the announcement is that the “nil rate band” for SDLT has increased from £125,000 to £500,000 for residential property, which means that such property can be acquired for up to this sum without triggering any SDLT liability.
Taxpayers should be aware however that the change applies only to residential property (and not commercial property) and the rules concerning higher rates for additional dwellings will continue to apply (but with the 3% rate available to £500,000).
The measure applies to transactions that are completed or substantially performed between 8 July 2020 and 31 March 2021 inclusive. The temporary rates do not apply where the transaction was substantially performed before 8 July 2020. This page on GOV.UK contains more information
The changes are in place for the period between 8 July 2020 and 31 March 2021 and so this is very much a temporary measure and there is no suggestion that the Government will look to extend beyond this date. Therefore, whilst this is clearly a welcome announcement, it should be viewed as an emergency measure without any longer term impact for the SDLT regime.
If you would like more information on the SDLT changes, please get in touch.
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