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Residential Rates on Purchases Update

Residential Rates on Purchases Update

If you purchase a residential property between 8 July 2020 to 31 March 2021, you only start to pay SDLT on the amount that you pay for the property above £500,000. These residential 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%

From 8 July 2020 to 31 March 2021 the special rules for first time buyers are replaced by the reduced residential rates for additional properties

 

Higher rates for additional properties

The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.

The following rates apply:

  • Property or lease premium or transfer value SDLT rate
  • Up to £500,000 3%
  • The next £425,000 (the portion from £500,001 to £925,000) 8%
  • The next £575,000 (the portion from £925,001 to £1.5 million) 13%
  • The remaining amount (the portion above £1.5 million) 15%

 

New leasehold sales and transfers

The nil rate band which applies to the ‘net present value’ of any rents payable for residential property is also increased to £500,000 from 8 July 2020 until 31 March 2021.

The following rates will apply:

  • Net Present Value of any Rent SDLT rate
  • Up to £500,000 Zero
  • Over £500,000 1%

Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge.

On the 1 April 2021, the reduced rates shown in the above tables will revert to the rates of SDLT that were in place prior to 8 July 2020.

 

 

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