A comprehensive list of the new UK tax allowances and thresholds for 2020 / 2021
On 8 July 2020 the Chancellor introduced an immediate 'Stamp duty holiday' lasting until March 2021.
During this period no stamp duty will be payable for first-time buyers and those purchasing their only property up to £500,000 in England and Northern Ireland. The deal must complete before or on 31 March 2021.
Our stamp duty calculator takes into account these changes.
This calculator has been updated to reflect the temporary new stamp duty rules for England and Northern Ireland introduced by the Chancellor on 8 July 2020.
This calculator is intended to give an indication only and applies to England and Northern Ireland only.
First-time buyers who are purchasing a buy-to-let property still pay stamp duty at the additional property rate and not the first-time buyer rate.
The Government's stamp duty holiday has removed stamp duty on the first £500,000 on all properties up to March 2021 in England and Northern Ireland.
Prior to the stamp duty holiday, stamp duty needed to be paid on residential properties and land bought with a value in excess of £125,000. First-time buyers have a discount that means they do not pay any stamp duty on properties up to £300,000. First-time buyers that purchase a property between £300,001 and £500,000 paid 5%.
During the stamp duty holiday, buy-to-let properties and second homeowners pay stamp duty at a rate of 3% on values up to £500,000. For additional homes or BTL properties in excess of £500,000 the buyer will have to pay 8% stamp duty up from £500,000 to £925,000, 13% on £925,000 to £1.5 million and a full 15% on any additional property purchase over £1.5 million in value.
In Scotland, the 0% Land and Buildings Transaction Tax (LBTT) threshold has increased to £250,000 from £145,000 and the Land Transaction Tax (LTT) threshold for freehold residential transactions in Wales has increased to £250,000 from £180,000, both until 31 March 2021. After this time, they will revert to the rates as per the appropriate tables below.
Example saving with current Stamp Duty holiday:
You purchase a property worth £350,000 and complete before the 31st March 2021.
Before the change you would pay nothing on the first £125,000, 2% on the following £125,001 to £250,000 and finally 5% stamp duty for the remainder of the value of £350,000.
First £1250,000 = £0.00 (0% x £125,000)
£125,001 to £250,000 = £2,500 (2% of £125,000)
£250,000 to £350,000 = £5,000 (5% of £100,000)
Total stamp duty before the holiday = £0 + £2,500 + £5,000 = £7,500.00
With the current stamp duty holiday you would pay nothing for a purchase up to £500,000, saving you the significant sum of £7,500.
As outlined above stamp duty is no longer payable for properties up to £500,000 in England and Northern Ireland from 08 July 2020 to 31 March 2021.
Stamp duty for properties in excess of £500,000 and for the purchase of additional homes will now be charged as per the details given in the ‘At what price does stamp duty start?' section above.
In Scotland, the 0% Land and Buildings Transaction Tax (LBTT) threshold has increased to £250,000 from £145,000 and the Land Transaction Tax (LTT) threshold for freehold residential transactions in Wales has increased to £250,000 from £180,000, both until 31 March 2021.
Stamp duty is calculated in a similar way to income tax bands. The bands are set by the land or property’s value and the percentage of stamp duty tax increases in each band. This means that the more expensive the property you want to buy, the more you will pay. The bands for residential properties and land stamp duty are:
England and Northern Ireland stamp duty bandings for residential property and land up to 31 March 2021
|
Property value |
Stamp duty rate |
|
Up to the first £500,000 |
0% |
|
£500,001 to £925,000 |
5% |
|
£925,001 to £1.5 million |
10% |
|
Above £1.5 million |
12% |
England and Northern Ireland stamp duty bandings for additional homes and buy-to-let properties up to 31 March 2021
|
Property value |
Stamp duty rate |
|
Up to the first £500,000 |
3% |
|
£500,001 to £925,000 |
8% |
|
£925,001 to £1.5 million |
13% |
|
Above £1.5 million |
15% |
England and Northern Ireland stamp duty bandings for residential property and land after 1 April 2021
|
Property value |
Stamp duty rate |
|
Up to the first £125,000 |
0% |
|
£125,001 to £250,000 |
2% |
|
£250,001 to £925,000 |
5% |
|
£925,001 to £1.5 million |
10% |
|
Above £1.5 million |
12% |
These examples are for stamp duty rates without the current exemption.
You purchase a property at £250,000.
You are allowed £125,000 with no stamp duty tax to pay.
You then calculate 2% of £125,000
Stamp duty to pay is £2,500
You purchase a house at £300,000.
You are allowed £125,000 with no stamp duty tax to pay.
You then calculate 2% of £125,000 . This is £2,500.
You then need to calculate 5% of £50,000. This is £2,500.
Finally total the two values from the stamp duty bands: 2,500 + £2,500 = £5,000
The amount of stamp duty to pay is £5,000.
Stamp duty land tax (SDLT) is the full name for stamp duty and indicates that this tax is payable on the purchase of property and land in the UK.
When calculating stamp duty, this is rounded down to the nearest full pound.
Stamp duty needs to be paid within 14 days of the effective transaction date. Often this is the completion date, but it may also be the earliest date the new owner can take passion of the property or where a substantial completion (at least 90% of the money owed is paid for the property).
A mortgage is the money lent to you by a mortgage lender to purchase the land or property. Stamp duty is a tax payable to HMRC. You can choose to add the cost of your stamp duty to your mortgage; however, this is at the lender’s discretion and it will incur interest costs over the life of the mortgage.
All land and property under £125,000 (£40,000 for a second home or buy-to-let property) is exempt from stamp duty, however with average house prices well in excess of this figure, most house buyers will not find this possible. Scenarios where stamp duty does not apply include if a property is being transferred due to divorce or separation or as part of your will.
The budget in March 2020 did not reduce stamp duty, however, as outlined above the Chancellor introduced a stamp duty holiday with immediate effect from 8 July 2021 up to and including 31 March 2021. During this period those buying their first home or moving will not pay stamp duty on the first £500,000 of their property’s purchase price. Additional homes and buy-to-let properties will enjoy a discounted rate of 3% stamp duty up to the same limit. For more information please see the information above.
If you purchase a new property and then have a delay in selling your existing home, you will be classed as a second-home owner and will need to pay the higher rate of stamp duty of an additional 3% on each stamp duty band. If you sell or transfer your previous home within three years, then you may be able to claim a refund of the higher rate stamp duty.
You can get a refund of stamp duty at the higher rate if you sell or transfer your former main residence within three years of purchasing your new home. You will need to claim the refund within three months of selling your former main home or within 12 months of filing your stamp duty tax return, whichever date is latest applies.
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