Stamp duty and SDLT

Rates

The main rates and thresholds for stamp duties and stamp duty land tax (SDLT) on both residential property and non-residential property remain unchanged for 2021/2022. However, a 2% surcharge on non-UK residents purchasing residential property in England and Northern Ireland comes into effect from 1 April 2021.

For a table of the main tax rates and allowances for 2021/2022, click here.

Extension to the temporary increase in the SDLT nil rate band for residential property

To reinvigorate the UK housing market following the first national coronavirus lockdown, the government temporarily increased the nil rate band for SDLT on residential property from £125,000 to £500,000 for the period 8 July 2020 to 31 March 2021.  This measure has enabled buyers to make SDLT savings of up to £15,000.

As a second shot in the arm for the housing market, the government has now announced that the temporary increase in the nil rate band to £500,000 will continue in place until 30 June 2021.  This will be replaced with a £250,000 threshold for the period 1 July 2021 to 30 September 2021, after which the nil rate band will return to £125,000.

The first of these extensions will alleviate concerns for the fate of house sales which are in the pipeline and which, for whatever reason, may not be completed by the original 31 March 2021 end date.  It can also be expected to continue to buoy the housing market for three further months.  However, for transactions completing between 1 July 2021 and 30 September 2021, the SDLT savings are much more modest (at most £2,500), so it remains to be seen whether the third 'dose' will continue to support higher transaction volumes.