Stamp duty land tax holiday illustrated

The chancellor announced a stamp duty land tax (SDLT) holiday in summer 2020. It was due to come to an end on 31 March 2021. However, in the budget on 3 March 2021, it was announced that the SDLT holiday is extended.

We've illustrated the effect of the extended SDLT holiday on UK resident individual buyers of residential property in England for purchases completed or substantially performed between:

The effect of the SDLT holiday is illustrated separately for these two periods because of the way the holiday is being 'tapered' or gradually reduced.

Summary of changes

The SDLT holiday works by means of temporary increase in the nil rate band for residential purchases in England and Northern Ireland.

Under the extended SDLT holiday:

  • a £500,000 nil rate band is in place until 30 June 2021 (rather than ending on 31 March 2021)
  • a £250,000 nil rate band is in place between 1 July 2021 and 30 September 2021
  • the nil rate band will return to the standard amount of £125,000 from 1 October 2021

First-time buyers' relief, which has no effect while the nil rate band is £500,000, will resume from 1 July 2021.

SDLT from 8 July 2020 to 30 June 2021

First-time buyers' relief rates

Pre-/post-holiday rates Holiday rates
SDLT band Rate SDLT band Rate
Up to £300,000 0% Up to £500,000 0%
£300,001 to £500,000 5%

For properties sold for more than £500,000, the rules for non-first-time buyers apply.

For more detail, see the government's guidance on reliefs and exemptions and HM Revenue and Customs' guidance note on SDLT relief for first time buyers.

Main residential home purchase standard rates (non-first-time buyers)

Pre-/post-holiday rates Holiday rates
SDLT band Rate SDLT band Rate
Up to £125,000 0% Up to £500,000 0%
£125,001 to £250,000 2% £500,001 to £925,000 5%
£250,001 to £925,000 5% £925,001 to £1,500,000 10%
£925,001 to £1,500,000 10% £1,500,001 and above 12%
£1,500,001 and above 12%

See the government's guidance on residential property rates.

Higher rates for additional dwellings

Additional dwellings, such as second homes and buy-to-let properties, are subject to higher SDLT rates.

Pre-/post-holiday rates Holiday rates
SDLT band Rate SDLT band Rate
Up to £125,000 3% Up to £500,000 3%
£125,000 to £250,000 5% £500,001 to £925,000 8%
£250,001 to £925,000 8% £925,001 to £1,500,000 13%
£925,001 to £1,500,000 13% £1,500,001 and above 15%
£1,500,001 and above 15%  

See the government's guidance on higher SDLT rates on purchases of additional residential properties.

What do the SDLT holiday rates mean for SDLT payable on residential property purchases by individuals at different price points?

Property price SDLT at standard residential property rates SDLT at higher rates for additional dwellings
£100,000 £0 £3,000
£200,000 £0 £6,000
£300,000 £0 £9,000
£400,000 £0 £12,000
£500,000 £0 £15,000
£600,000 £5,000 £23,000
£700,000 £10,000 £31,000
£800,000 £15,000 £39,000
£900,000 £20,000 £47,000
£1,000,000 £28,750 £58,750
£1,100,000 £38,750 £71,750
£1,200,000 £48,750 £84,750
£1,300,000 £58,750 £97,750
£1,400,000 £68,750 £110,750
£1,500,000 £78,750 £123,750
£1,600,000 £90,750 £138,750

Here's the information illustrated in bar and line chart forms:

SDLT from 1 July 2021 to 30 September 2021

First-time buyers' relief rates

The standard first-time buyers' relief rates apply, where the relevant conditions are met.

For properties sold for more than £500,000, the rules for non-first-time buyers apply.

For more detail, see the government's guidance on reliefs and exemptions and HM Revenue and Customs' guidance note on SDLT relief for first-time buyers.

Main residential home purchase standard rates (non-first-time buyers)

Pre-/post-holiday rates Holiday rates
SDLT band Rate SDLT band Rate
Up to £125,000 0% Up to £250,000 0%
£125,001 to £250,000 2% £250,001 to £925,000 5%
£250,001 to £925,000 5% £925,001 to £1,500,000 10%
£1,500,001 and above 12%    

See the government's guidance on residential property rates.

Higher rates for additional dwellings

Additional dwellings, such as second homes and buy-to-let properties, are subject to higher SDLT rates.

 Pre-/post-holiday rates  Holiday rates
SDLT band Rate SDLT band Rate
 Up to £125,000 3% Up to £250,000 3%
£125,001 to £250,000 5% £250,001 to £925,000 8%
£250,001 to £925,000 8% £925,001 to £1,500,000 13%
£925,001 to £1,500,000 13% £1,500,001 and above 15%
£1,500,001 and above 15%    

See the government's guidance on higher SDLT rates on purchases of additional residential properties.

Indications of the SDLT payable on residential property purchases by individuals at different price points

As with the other illustrations here, this table provides a guide only and the rate payable will change according to the price of a particular property.

Property price SDLT at standard residential property rates SDLT at higher rates for additional dwellings
£100,000 £0 £3,000
£200,000 £0 £6,000
£300,000 £2,500 £11,500
£400,000 £7,500 £19,500
£500,000 £12,500 £27,500
£600,000 £17,500 £35,500
£700,000 £22,500 £43,500
£800,000 £27,500 £51,500
£900,000 £32,500 £59,500
£1,000,000 £41,250 £71,250
£1,100,000 £51,250 £84,250
£1,200,000 £61,250 £97,250
£1,300,000 £71,250 £110,250
£1,400,000 £81,250 £123,250
£1,500,000 £91,250 £136,250
£1,600,000 £103,250 £151,250

Here's the information illustrated in bar and line chart forms:

Situations to watch out for

Watch out for situations not necessarily covered by the illustrations above, such as:

  • purchases by non-UK residents
  • purchases by companies or other non-natural persons
  • linked transactions
  • new leasehold sales and transfers
  • if the property price is not the same as relevant consideration for SDLT purposes
  • cases where multiple dwellings relief might apply
  • properties with annexes, subsidiary dwellings, paddocks or fields
  • shared ownership properties
  • not sold old main residence when buying a new main residence

If in doubt, seek specialist advice.

Note that all the illustrations above assume the purchaser is resident in the UK for SDLT purposes. As announced in the 2020 budget, a 2% SDLT surcharge on residential property in England and Northern Ireland purchased by non-UK residents came into effect from 1 April 2021.

Read more about the new rates for non-UK residents

The rules are different for properties in Wales. Read the Welsh government guidance on land transaction tax.

Resources

GOV.UK guidance on SDLT for different types of property purchase

GOV.UK resources on stamp duty

SDLT online calculator – updated for the new rates of SDLT

HMRC tax information and impact note on the extension of the temporary increase to the SDLT nil rate band for residential properties