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SDLT boost for homes in England and Northern Ireland

8 July 2020: The Chancellor has cut stamp duty land tax (SDLT) to encourage confidence in the residential property market following the coronavirus lockdown.

The housing market has been severely hit by the COVID-19 pandemic, with both house sales and construction activity slowing. As part of the government’s “Plan for Jobs” – in particular job creation – the Chancellor announced an immediate increase in the nil rate band for residential SDLT in England and Northern Ireland, from £125,000 to £500,000. This increase will apply from 8 July 2020 until 31 March 2021.

The aim of this measure is to boost medium-term confidence in the property market and maintain the growing momentum in house sales since the easing of lockdown. The government hopes that this will not only boost jobs directly involved in the housing market and its supply chain, but that it will also provide a wider economic stimulus as it is estimated that house sales drive additional spending worth about 5% of the house value.

The Chancellor commented: “Millions of people in Scotland, Wales and Northern Ireland have been protected by the UK government’s economic interventions – and they will be supported by today’s Plan for Jobs.”

However, SDLT does not apply in Wales and Scotland with land transaction tax (LTT)  applying in Wales and land and buildings transactions tax (LBTT) applying in Scotland. It is not yet known if the devolved administrations will make similar announcements for those taxes.

The Tax Faculty highlights that today’s announcement does not change the position for first-time buyers who already enjoyed a relief from SDLT on purchases up to £500,000.

However, it will temporarily reduce the amount of SDLT payable at the higher rate for additional dwellings. It will also reduce the amount of SDLT payable on transactions over £500,000 as the first £500,000 of chargeable consideration will benefit from the lower rates.

For example, if you brought a property that was not an additional property for £750,000 on 7 July 2020, the SDLT would have been £27,500. If you purchased the same property on 8 July 2020, the SDLT is £12,500.

The table below sets out how the rates have changed. 

Property value Standard rates
Higher rates

Rate up to 7 July 2020 Rate from 8 July 2020 to 31 March 2021 Rate up to 7 July 2020 Rate from 8 July 2020 to 31 March 2021
Up to £125,000 0% 0% 3% 3%
The next £125,000 (the portion from £125,001 to £250,000) 2% 0% 5% 3%
The next £250,000 (the portion from £250,001 to £500,000) 5% 0% 8% 3%
The next £425,000 (the portion from £501,001 to £925,000) 5% 5% 8% 8%
The next £575,000 (the portion from £925,001 to £1.5m)  10% 10% 13% 13%
The remaining amount (the portion above £1.5m) 12% 12% 15% 15%