Stamp Duty: government clarifies Budget announcement

The government has issued an official note to detail the announcement made yesterday by Chancellor Rishi Sunak regarding stamp duty holiday changes.

The headlines are broadly unchanged from Sunak’s announcement, but the new paperwork from the government sets out the duty details for company purchases of property, and for additional homes. 

Here is the government statement in full:

“The temporary increase to the nil rate band for Stamp Duty Land Tax, which is the rate before you start paying SDLT on residential property has been extended.

“Rather than ending on 31 March 2021, the temporary nil rate band of £500,000 will be in place until 30 June 2021. Then from 1 July 2021 to 30 September 2021 the nil rate band will be £250,000. The nil rate band will return to the standard amount of £125,000 on 1 October 2021.

“If you purchase a residential property between 8 July 2020 to 30 June 2021, you only start to pay SDLT on the amount that you pay for the property above £500,000. These rates apply whether you are buying your first home or have owned property before.

“From 8 July 2020 to 30 June 2021 the special rules for first time buyers are replaced by the reduced rates set out above.

“If you purchase a residential property between 1 July 2021 to 30 September 2021, you only start to pay SDLT on the amount that you pay for the property above £250,000.

“From 1 July 2021 the special rules and rates for first time buyers apply, including first time buyers purchasing property through a shared ownership scheme.

“The three per cent higher rate for purchases of additional dwellings applies on top of temporary reduced rates above for the period 8 July 2020 to 30 June 2021 and also for the period 1 July 2021 to 30 September.

“From 1 October 2021 the higher rates will then apply on top of the standard rates of SDLT.

“The nil rate band which applies to the ‘net present value’ of any rents payable for residential property is also increased to £500,000 from 8 July 2020 until 30 June 2021. From 1 July 2021 to 30 September 2021 the nil rate band will then be decreased to £250,000.

“Companies as well as individuals buying residential property below the nil rate band thresholds shown in the above tables will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15 per cent SDLT charge.

“On the 1 October 2021 the temporary rates of SDLT will revert back to the standard rates that were in place prior to 8 July 2020.”