Chancellor Rishi Sunak has announced the removal of Stamp Duty Land Tax (‘SDLT’) on principal homes worth less than £500,000 in England and Northern Ireland, in a bid to boost the housing market.
The starting threshold for paying SDLT was £125,000 but following the announcement, many properties in Buckinghamshire, which on average cost around £407,894, will be removed from stamp duty altogether. Homes which cost more than £500,000 will still benefit from a cut in SDLT with duty starting at 5%, rising to 10% and 12% on more expensive houses.
The SDLT holiday will start with effect from midnight last night so any completions on main residences today will get the benefit and it will last until the 31 March 2021.
What is SDLT
In England and Northern Ireland, SDLT is a tax paid by buyers of a property or piece of land over a certain price. The stamp duty paid is dependent on the price and type of property.
Before the announcement, all house-buyers in England and Northern Ireland had to pay SDLT on properties sold for £125,000 or more, calculated on a banded basis. If you were a first-time home buyer, then relief was available (subject to certain conditions) on houses up to £500,000.
Additional surcharge of 3% will still be payable on additional dwellings, for example, when landlords purchase a buy-to-let property in England and Northern Ireland.