Immediate changes to Stamp Duty Land Tax rates
The housing sector can today breathe a sigh of relief following the Government’s economic update which set out a variety of new policies and incentives to assist the UK in recovering from the economic fallout caused by the Covid-19 crisis.
As part of the Government’s strategy to address the ‘profound economic challenges’ the UK faces, the Chancellor of the Exchequer, Rishi Sunak, announced that with immediate effect the threshold for the Stamp Duty Land Tax (SDLT) trigger will increase to £500,000.
SDLT is a tax levied on property and land and the amount payable depends on the value of the property or land, where you are in the UK and whether or not you are a first-time buyer. Prior to today’s announcement buyers in England and Northern Ireland were not charged SDLT on property or land valued at under £125,000. As of today this value has increased to £500,000 – four time the original exemption value.
The increased threshold will also apply to those buying second homes. Although the higher rates for second homes will still apply, the 3% band will extend to the first £500,000 of the purchase price rather than the first £125,000. The effect of which is that those buying second homes will pay significantly less SDLT.
It is hoped that the new SDLT threshold will help to kickstart the housing market by encouraging buyers to proceed with purchases in the uncertain times that lie ahead. The changes to SDLT have immediate effect and will remain in place until 31st March 2021.