Temporary changes to SDLT rates stand to benefit residential buyers

Good news for anyone proposing to buy a residential property as the Chancellor announced on 8 July that the nil rate band for stamp duty land tax has increased to £500,000 with immediate effect. The increase is part of government measures to help the residential property market return to normal, after property sales fell by half in May, and negative annual house price growth was observed in June for the first time since 2012. 

The change will mean considerable savings for residential buyers. Previously, for non-first time buyers, the nil rate band was set at £125,000, with SDLT payable above this figure as a percentage depending on the purchase price of the property. For example, in the case of a property worth £300,000, a buyer would pay nothing up to £125,000, 2% on the price up to £250,000, and then 5% on the price up to £300,000, totalling £5,000 in SDLT. Under the new rules, the same buyer would not have to pay any SDLT at all. 

The increase in the nil rate band applies to first time buyers and those who have purchased property before, as well as companies buying residential property. People purchasing second homes or as buy-to-let will still have to pay the additional 3% SDLT surcharge, but will also benefit from the increased nil rate band, paying just 3% up to £500,000.  

Buyers will have to move quickly however, as the increase is only scheduled to last until 31 March 2021. SDLT rates will then automatically revert back to the previous levels.  

PWW have an active residential property team who are operating at full capacity during the current lockdown, and can assist with all of your conveyancing needs. Please do not hesitate to contact our conveyancing team by clicking here. You can read more about our residential property services here and check our conveyancing fee scale here.

 

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