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Stamp duty holidays all over the UK

Sunak has prompted a tsunami of stamp duty rate cuts across the UK for residential property. Andrew Evans explains how the devolved administrations have reacted and what this means for buyers. 

16th Jul 2020
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The tax commonly known as “stamp duty” (charged on the purchase of property in the UK) is devolved to the governments in Scotland (where is charged as LBTT) and Wales (imposed as LTT). The stamp duty charge for properties acquired in England and Northern Ireland is called SLDT.

Chancellor Rishi Sunak announced a SDLT holiday in his summer statement on 8 July 2020, to take effect immediately.

The Scottish Government were quick off the mark with an announcement of their LBTT holiday on 9 July, taking effect from 15 July. The Welsh Government announced their LTT holiday on 14 July to take effect from 27 July 2020.

England and Northern Ireland

The Chancellor announced a lifting of the threshold for SDLT to £500,000 for residential property transactions taking place between 8 July 2020 and 31 March 2021. This means that no SDLT will be payable on homes costing up to £500,000 when it is the main residence of the buyer. The purchase of additional residential properties (holiday homes or buy-to-let properties) and the purchase of residential properties by companies will still be subject to the 3% SDLT surcharge. 

According to the UK House Price Index for March 2020 the average price of a property in England was £248,271.

The SDLT holiday still benefits the purchasers of second homes with a saving of up to £15,000 on the purchase of a property for £500,000. The SDLT table illustrates the amount of SDLT payable at various price points.

SDLT Table

Price (£)

Main home

Additional properties

Normal rates Holiday rates Normal rates Holiday rates
250,000 2,500 0 10,000 7,500
400,000 10,000 0 22,000 12,000
500,000 15,000 0 30,000 15,000
1,000,000 43,750 28,750 73,750 58,750

Scotland

The rates of LBTT are different from SDLT and the nil rate threshold for LBTT starts at £145,000.

The Scottish Finance Minister announced an increase in the nil rate threshold for residential property to £250,000 to take effect from 15 July 2020 and to end on 31 March 2021. Scotland charges a 4% surcharge on the purchase of additional residential property and this remains unchanged. Buyers of additional properties in Scotland will still benefit from the increase in the LBTT threshold.

According to the UK House Price Index for March 2020 the average price of a property in Scotland was £151,686.  Due to the different bands and rates of LBTT, the maximum saving in Scotland is £2,100 as indicated in the LBTT table.

LBTT table

Price (£)

Main home

Additional properties

Normal rates Holiday rates Normal rates Holiday rates
250,000 2,100 0 12,100 10,000
400,000 13,350 11,250 29,350 27,250
500,000 23,350 21,250 43,350 41,250
1,000,000 78,350 76,250 118,350 116,250

Wales

The rates of LTT are different to both SDLT and LBTT with the starting threshold for residential property at £180,000.

The Welsh Finance Minister announced on 14 July that the starting rate threshold for LTT would be increased to £250,000 but it would only apply to transactions from 27 July 2020 and would also end on 31 March 2021. The 27 July date has been picked to coincide with when property viewings of occupied properties will be allowed in Wales. The maximum saving in LTT will be £2,450.

One difference in Wales compared to England and Scotland is that the increase in the LTT threshold will not apply to the purchase of additional residential properties where the existing bands will apply together with the 3% LTT surcharge.

According to the UK House Price Index for March 2020 the average price of a property in Wales was £161,684. 

The LTT table shows the differences in LTT for the purchase of a main home.

LTT table

Price (£)

Main home

Additional properties
Normal rates Holiday rates Normal rates (no holiday)
250,000 2,450 0 9,950
400,000 9,950 7,500 21,950
500,000 17,450 15,000 32,450
1,000,000 61,200 58,750 91,200

No consultation

The introduction of a SDLT holiday had been widely trailed in the newspapers before the Chancellor’s Summer Statement.

Although the Scottish government were quick to react, the first reaction from the Welsh government (on Twitter) was that they had not been consulted in advance about the SDLT reduction.

The residential property market in Wales will now be on hold until 27 July where buyers want to take advantage of the maximum £2,450 saving.  Buyers of residential property in Scotland knew pretty quickly that their transactions would be delayed by a week to 15 July.

The differences in the starting rate thresholds reflects the different property values around the UK. It is also notable that the LTT reduction only applies to the purchase of main homes and the change in threshold will not apply to additional residential properties such as holiday homes and buy-to-let properties.

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By Ajtms
20th Jul 2020 10:13

Please will readers sign the online petition to the government asking for the temporary relaxation of Stamp Duty to be backdated to the start of the lockdown in March as there are thousands of people who were forced to move for personal circumstances had their completions delayed until after the lockdown and they completed just before the 8 July Budget.

https://petition.parliament.uk/petitions/310695

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