OPINION
COVID-19 AND THE STAMP DUTY HOLIDAY
On 8 July 2020 the Chancellor gave a statement in Parliament outlining a stamp duty ‘holiday’. He said the aim of the holiday was to “catalyse the housing market and boost confidence”. He cited the importance of the construction sector to the economy – it contributes £39bn a year and house building supports nearly 750,000 jobs – and a worrying trend characterised by house prices falling for the first time in eight years and the number of transactions falling by 50% in the first lockdown. Sarah Woodall, Partner at Harrison Clark Rickerby, looks into the scheme. Tax savings Thanks to the Stamp Duty Land Tax (SDLT) holiday, a residential property bought between 8 July 2020 and 31 March 2021 only starts to attract SDLT on the amount paid above £500,000 in England and above £250,000 in Wales . These rates apply whether you are buying your first home or have owned property before. The reduced SDLT rates for England can be summarised: PROPERTY OR LEASE PREMIUM OR TRANSFER VALUE SDLT RATE Up to £500,000 Zero The next £425,000 (from £500,001 to £925,000) 5% The next £575,000 (from £925,001 to £1.5m) 10% The remaining amount (above £1.5m) 12%
For people buying a second home, in England the 3% higher rate for purchases applies on top of revised standard (holiday) rates, for the same period. This means for second home buyers the holiday rates are: PROPERTY OR LEASE PREMIUM OR TRANSFER VALUE ENGLISH SDLT RATE Up to £500,000 3% The next £425,000 (from £500,001 to £925,000) 8% The next £575,000 (from £925,001 to £1.5m) 13% The remaining amount (above £1.5m) 15% 22 www.birminghamlawsociety.co.uk
