Partner Geldards
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Budget 2021: Stamp Duty holiday extended to June

The Chancellor has confirmed a three-month extension to the stamp duty land tax holiday until 30 June 2020, and the Welsh Government has followed his lead with an extension of LTT, also to 30 June.

3rd Mar 2021
Partner Geldards
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SDLT

In a widely trailed announcement, the Stamp Duty Land Tax “holiday” was extended at the zero rate band of £500,000 from 31 March to 30 June 2021. What was unexpected was a further extension until 30 September 2021 albeit at reduced zero rate band of £250,000 from 1 July to 30 September. 

The extension means that all residential property transactions involving a main home completed on or before 30 June 2021 for a consideration up to £500,000 will not pay any SDLT. 

Residential purchases involving a main home completed on or before 30 September 2021 for a consideration of up to £250,000 will not pay any SDLT. Normal rates of SDLT apply to the purchase price above the relevant thresholds and the £125,000 zero rate threshold will take effect from 1 October 2021.

The SDLT “holiday” also benefits the purchase of investment properties (such as holiday homes and property to rent) by individuals and the purchase of residential properties by companies. These transactions are subject to the 3% SDLT surcharge rate that applies to each band of SDLT. The extension of the holiday means that the £500,000 and £250,000 limits will be subject to the 3% SDLT surcharge rate. 

The extension of the holiday pushes the cliff edge of the relief ending to later in the year. SDLT applies to property purchases made in England and Northern Ireland.

SDLT up to 30 June 2021

 

Relevant consideration

“Standard” property purchase

Additional rates residential property purchase

Not exceeding £500,000

0%

3%

Over £500,000 but does not exceed £925,000

5%

8%

Over £925,000 but does not exceed £1,500,000

10%

13%

Over £1,500,000

12%

15%

 

SDLT up to 30 September 2021

 

Relevant consideration

“Standard” property purchase

Additional rates residential property purchase

Not exceeding £250,000

0%

3%

Over £250,000 but does not exceed £925,000

5%

8%

Over £925,000 but does not exceed £1,500,000

10%

13%

Over £1,500,000

12%

15%

 

The Scottish Government and the Welsh Government have both previously announced in their Budgets that the “holiday” or increase of the nil rate band for Scottish Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) respectively will end on 31 March 2021 with no further extension. 

However, following Sunak's Budget, the Welsh Finance Minister announced an extension of the LTT holiday until 30 June 2021. This means the nil rate band for LTT will be up to £250,000 rather than the usual amount of £180,000. The LTT holiday only applies to the purchase of a main residence, it does not apply to buy-to-let properties or holiday homes which are subject to the standard rates of LTT plus the 4% additional property surcharge.

The LTT surcharge for additional rates residential property purchases was increased with effect from 22 December 2020, from 3% to 4% (in line with the surcharge in Scotland).

From the same date, the zero rate threshold for non-residential property purchases and the threshold for lease rental Net Present Value calculations was increased from £150,000 to £225,000.

Stamp duty

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