Most people buying property in England and Northern Ireland must pay Stamp Duty Land Tax (SDLT) on their purchase. This was payable on all property over £125,000. But in July 2020, the government raised the threshold to £500,000 as a response to COVID-19 and its effect on the property market.
This has become known as a ‘Stamp Duty Tax holiday’ – a brief respite, not a totally rewritten policy. It’s a short term measure that’s coming to an end. So if you’re intending to buy and want to take advantage of the lower SDLT rate, you need to know your dates.
What’s the ‘holiday’ rate of SDLT?
The holiday SDLT rates give you a £15,000 tax break – quite a substantial amount to save, especially when you’re making such a big life change. Here’s how they compare to the pre-pandemic rates. This is for residential properties only.
| Value of property | SDLT holiday rate | SDLT pre-pandemic rate |
| £100,000 | £0 | £0 |
| £200,000 | £0 | £1,500 |
| £300,000 | £0 | £5,000 |
| £400,000 | £0 | £10,000 |
| £500,000 | £0 | £15,000 |
| £600,000 | £5,000 | £20,000 |
| £700,000 | £10,000 | £25,000 |
| £800,000 | £15,000 | £30,000 |
| £900,000 | £20,000 | £35,000 |
| £1,000,000 | £28,750 | £43,750 |
| £1,100,000 | £38,750 | £53,750 |
| £1,200,000 | £48,750 | £63,750 |
| £1,300,000 | £58,750 | £73,750 |
| £1,400,000 | £68,750 | £83,750 |
This tax is payable on freehold properties, new or existing leasehold purchases, transferred land or property and on property bought through a shared ownership scheme.
The threshold for non-residential properties is currently £150,000.
When does the SDLT holiday rate end?
This tax cut applied from 8th July 2020 and end on 30th June 2021. To avoid a sudden leap back to pre-pandemic rates, there will be an interim step.
Between 1st July 2021 and 30th September 2021 the SDLT threshold for residential properties will decrease to £250,000.
Then, from 1st October 2021, it goes back down to £125,000.
For non-residential properties, the threshold remains at £150,000 throughout.
What are the SDLT rates from October 2021?
This is the HMRC table, explaining the percentage of SDLT that’s charged on each portion of your house’s price.
| Property or lease premium or transfer value | SDLT rate |
| Up to £125,000 | Zero |
| The next £125,000 (the portion from £125,001 to £250,000) | 2% |
| 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% |
Example
The house costs £300,000. Your SDLT calculation is:
- First £125,000: 0% = £0
- Next £125,000: 2% = £2,500
- Final £50,000: 5% = £2,500
- Total SDLT to pay: £5,000
HMRC has a handy free calculator to help you work out the SDLT on the properties you’re considering.
Is there no SDLT to pay in Scotland and Wales?
There is still tax to pay on property and land purchases in Scotland and Wales – they’re just called something different.
Scotland
On 1 April 2015, the Scottish Parliament replaced SDLT with Land and Buildings Transaction Tax (LBTT).
The rates as of 1st April 2021 are as follows:
| Price of property or land | Land and Buildings Transaction Tax |
| £145,000 | 0% |
| £145,001 to £250,000 | 2% |
| £250,001 to £325,000 | 5% |
| £325,001 to £750,000 | 10% |
| Over £750,000 | 12% |
Wales
In Wales, the Welsh Parliament sets their Land Transaction Tax (LTT) rates.
| Property price | Rate from 27 July 2020 to 30 June 2021
|
Rate from 1st July 2021 |
| Up to £180,000 | 0% | 0% |
| £180,000 to £250,000 | 0% | 3.5% |
| £250,000 to £400,000 | 5% | 5% |
| £400,000 to £750,000 | 7.5% | 7.5% |
| £750,000 to £1,500,000 | 10% | 10% |
| Over £1,500,000 | 12% | 12% |
If you’re ready to buy a property, you can save yourself a few thousand pounds by paying attention to these tax cut deadlines. It’s very unlikely that they’ll go back down again after they return to pre-coronavirus rates. So if you can – take advantage of the tax break on your new home.
