Sarah Sargent, Partner and Head of Residential Property at Lupton Fawcett, answers your questions on property issues. 

What is the SDLT Holiday?

The Government introduced a temporary increase to the nil rate band for Stamp Duty Land Tax (SDLT) until 30th June 2021 in order to give a boost to the housing market during the Pandemic

If you purchase a residential property between 8 July 2020 to 30 June 2021, you only start to pay SDLT on the amount that you pay for the property above £500,000. These rates apply whether you are buying your first home or have owned property before.

You can use the table to work out the SDLT due:

Property or lease premium or transfer value SDLT rate
Up to £500,000 Zero
The next £425,000 (the portion from £500,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%

 

If you purchase a residential property between 1 July 2021 to 30 September 2021, you only start to pay SDLT on the amount that you pay for the property above £250,000.

You can use the table to work out the SDLT due.

Property or lease premium or transfer value SDLT rate
Up to £250,000 zero
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%

From 1 July 2021 the special rules and rates for first time buyers apply, including first time buyers purchasing property through a shared ownership scheme.

NB that other rates such as 3% surcharge for second properties will still apply so it is important that you take detailed advise on the SDLT position.

If I have exchanged by 30th June will the lower rates still apply? 

No.  In order to qualify for the lower rates you must have completed by 30th June (to qualify for a relief up to £500,000) and 30th September (to qualify for a relief up to £250,000).  Completion means that you must have legally completed on the transaction.  In most cases this will mean that the monies have been paid and the legal title has been transferred to the new buyer.

Some groups are currently lobbying the Government to change their position on this to allow exchange of contracts to trigger the lower rate but these is no certainty that this will be successful.

Can I lower my offer if we have not completed by the deadline? 

Up until exchange of contracts you are of course free to renegotiate the price.  You should however note that any change in price will need to be reported to your lender and so you should speak with your financial advisor before entering in to any such discussions.

For further help or guidance on this article or in relation to Residential Property generally, please contact Sarah Sargent, on 0114 228 3281 or sarah.sargent@luptonfawcett.law.

 

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

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