In July 2020 the Government substantially reduced the amount homebuyers pay in SDLT in order to ease the burden of the pandemic – with savings of up to £15,000 until 31st March 2021.
There has in the past been some confusion as to whether the rate bands are applied once on the whole amount or incremental, ie escalating rates on successive portions. The latter is the case, and for the sake of clarity the following is the current banding table for most residential properties in England, Wales and Northern Ireland:
A property costing up to £500,000 – nil (quite amazing really!)
The portion of the purchase price between £501,000 and £925,000 – 5% (ie up to £21,250 in SDLT)
Plus the portion of the purchase price between £925,001 and £1.5m – 10% (ie up to £57,500 n SDLT))
Plus the portion of the purchase price over a £1 million – 12%
Please note that the above applies to your principal residence only. If you are buying an investment property or second home, you must add an additional 3% of the purchase in SDLT and there is legislation being introduced in April suggesting an additional 2% for overseas purchasers buying here.
An example would be if you are buying your principal residence costing eg £600,000 would currently pay £5,000 in SDLT (ie 5% on the £100,000 amount over £500,000). You can find an SDLT calculator at http://www.hmrc.gov.uk/tools/sdlt/land-and-property.htm
Bear in mind that the £500,000 concessionary threshold is temporary – you must complete (not just exchange on) any purchase by 31st March 2021. So if you are thinking of moving this coming Spring you’d be well advised to bring things forwards!
The above will cover most situations, but there are certain exceptions and reliefs, so it’s worth taking professional advice in relation to your own specific situation. Please feel free to call us if you’d like to discuss. We’re here to help you move!