When buying a property there are many costs associated that a buyer will need to have budgeted for when completing their transaction. One of these costs, SDLT (Stamp Duty Land Tax) can often be a large proportion of the total outgoing fees which is often a bitter pill to swallow. Therefore, it was no surprise that when the government introduced its Stamp Duty holiday back in July 2020, the property market saw an influx of buyers.
Currently, the Stamp Duty holiday means that buyers do not pay anything on a property transaction up to the first £500,000. But with the Stamp Duty holiday set to end on the 31st of March this year, how much money will you have to pay?
As outlined by the government, once the holiday ends, rates from 1 April 2021 will resume to the following:
| 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% |
(Credit Gov.uk)
These rates are reflective of what buyers were paying before the July 2020 holiday was announced. Furthermore, first-time buyers (FTBs) can take solace in the fact that they still will be able to receive support from the government.
Firstly, FTBs will not have to pay any Stamp Duty on a property up to £300,000. And for properties from £300,001 and £500,000, they will only pay a 5% SDLT portion. This also applies if you and someone else are also first-time buyers. But if the price of the property is over £500,000 the rules for second-time buyers will apply.
If you are unsure about how much tax you will pay, you can use an SDLT calculator which shows a full breakdown.
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