As widely anticipated, the Budget confirmed that the temporary increase in the amount that a purchaser can pay for residential property before they pay Stamp Duty Land Tax (SDLT), which was originally due to end on 31 March 2021, has been extended to 30 June 2021. This applies to transactions in England and Northern Ireland.
Accordingly, the temporary £500,000 band continues to apply such that ‘normal rate’ purchasers will pay no SDLT on purchases of up to £500,000 and ‘higher rate’ purchasers will pay a flat 3% rate up to this amount. This will continue to offer a SDLT saving of up to £15,000 for buyers.
It was also announced that, rather than reducing straight back down to the original £125,000 threshold, the increased £500,000 band will reduce down to £250,000 in the period 1 July 2021 to 30 September 2021. This should result in a reduced SDLT saving of up to £2,500 where the purchase is completed before 1 October 2021. Where the purchaser is a ‘first time buyer’ relief will continue to be available to be claimed on purchases for £500,000 or less.
By Ian Pring, Tax Partner