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  • Writer's pictureThe Cedar Crest Team

Stamp Duty Land Tax

How much do I have to pay now the holiday has finished?

Stamp Duty Land Tax (SDLT) Holiday


UK Chancellor, Rishi Sunak, announced in his March Budget that the Stamp Duty Land Tax (SDLT) holiday would be tapered from the 1 July 2021 ahead of its full withdrawal in October.


Now this date has passed, from 1 October the 0% SDLT threshold has returned to £125,000, or £300,000 for first-time buyers purchasing a property worth up to £500,000.


 

FREEHOLD AND LEASEHOLD PROPERTIES


SDLT is a tax payable when you buy a residential property or a piece of land in England or Northern Ireland over a certain price.


It is calculated as a percentage of the property you are buying and applies to both freehold and leasehold properties – whether you’re buying outright or with a mortgage.


If you’re buying a property in Scotland, you will pay Land and Buildings Transaction Tax (LBTT) and in Wales Land Transaction Tax (LTT) instead of Stamp Duty.


 

SDLT FROM 1 OCTOBER 2021


From October, the rates of SDLT have returned to their prepandemic levels.


Potential buyers should note that the standard rate doesn’t necessarily apply to them, as there are the following exceptions to be aware of:


• Buyers who already own a property will pay a 3% surcharge on additional property purchases

• Non-UK residents will pay a 2% surcharge on any property they buy

• First-time buyers will pay 0% on the portion of the property up to £300,000 and 5% on the portion of the property between £300,001 and £500,000, unless the total property value is over £500,000, in which case the standard rates will apply.


 

SDLT RATES FROM 1 OCTOBER 2021


These rates also apply if you bought a property before 8 July 2020.


 

HIGHER SDLT RATES FOR ADDITIONAL PROPERTIES


You’ll usually have to pay 3% on top of SDLT rates if buying a new residential property means you’ll own more than one.

 

BUDGETING FOR THE CORRECT AMOUNT


Buyers need to understand the SDLT rates and to budget for the correct amount of tax which will be due on purchases.


The land tax return must be submitted alongside payment of SDLT within 14 days after the effective date of the transaction, to avoid penalties and interest charges.


That is not long to get the form and payment organised.


 

>> LET US HELP YOU FIND A MORTGAGE DEAL <<


Looking for a new mortgage? On the move? Switching your mortgage? Whether you want to buy a first or new home, remortgage your current property, borrow more or buy to let – we’re here to help.


To make an informed decision about the right mortgage for you or to discuss your situation, contact Cedar Crest Ltd – telephone UK T: +44 (0) 203 883 1017, HK T: +852 6645 4462 – email info@cedar-crest.co.uk


Your home may be repossessed if you do not keep up repayments on your mortgage.



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