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Changes to Stamp Duty Land Tax Holiday

As the end of the month approaches, so do changes to the Stamp Duty Land Tax (SDLT) ‘holiday’ which was introduced in July 2020 to provide a welcome stimulus to the residential property market.

The impact has certainly been apparent with conveyancers working flat out to push sales through before 1 July 2021.  To recap, the SDLT nil rate normally applies to the first £125,000 paid for residential property however the ‘holiday’ extended this 0% band to the first £500,000 of the purchase price.  This band will apply until 30 June 2021, it will then reduce to £250,000 until the end of October 2021 and thereafter the usual band of £125,000 will be reinstated.

The SDLT holiday can save purchasers up to £15,000 in SDLT and whilst this applies to purchasers of their only or main residence, it has also benefitted landlords and those with second homes.  The ‘additional dwelling surcharge’ of 3% continues to apply within the nil rate band, however, there are still significant savings.

With the property market flourishing, care must be taken to ensure that disposals of residential property are reported to HMRC within the new 30-day time limit, which was introduced April 2020 and any tax paid by the same deadline.  With the new system having been in place over a year now, we are seeing HMRC impose penalties for failure to comply.

If you have any questions regarding the changes or would like to discuss this further with one of our experts, please contact us.