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SDLT Holiday: They think it's all over.........................

View profile for Harvey Gibbs
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England’s long-awaited victory over Germany came on the eve of the last day of the Stamp Duty Land Tax (SDLT) “Holiday”. It was therefore with some very sore heads that Conveyancers in England arrived at work on 30 June faced with the prospect of many purchases that needed to complete by close of business. This was so that their clients would could reduce their SDLT bill, or avoid having to pay any SDLT at all.

The Holiday had been introduced by the Government on 8 July 2020 and had been due to end on 31 March 2021 but had been extended to 30 June 2021. It was part of the Government’s economic response to the COVID pandemic and was intended to bolster the residential housing market during what was expected to be a very difficult period.

So what was the SDLT Holiday?

The payment of SDLT potentially applies to any land transaction, but the Holiday applied to the purchase of residential dwellings. It is normally payable by the purchaser where the purchase price exceeds £125,000.00. However, the Holiday temporarily raised this threshold to £500,000.00 so that any purchaser paying that figure or less paid no SDLT at all (unless the purchaser was a limited company or second home buyer). A purchaser paying over £500,000.00 also stood to benefit in that the first £500,000.00 of the purchase price was free of SDLT thereby reducing the amount of SDLT that was payable.

As much as £15,000.00 could be saved and this has undoubtably fuelled the number of home sales over the last year, as many weary conveyancers will tell you.

It is interesting to note that the last time England beat Germany in a knock out competition, back in 1966, the average house price in this country was £2,006.00, and “Stamp Duty” (as it was then known) would not have been payable on that figure. How times have changed since Geoff Hurst scored his hat trick!

As I have mentioned, corporate or second home buyers have continued to pay SDLT but even they were able to enjoy savings in that only the SDLT second home surcharge had to be paid. They did not have to pay the “basic” SDLT insofar as their purchase price was less than £500,000.00.

From comments that I have heard it is clear that many buyers are under the impression that the Holiday is now over. However, this is not strictly correct.

So when does the SDLT Holiday end?

From 1 July 2021 to 30 September 2021 some SDLT relief is still available in that the threshold will be £250,000.00. Only from 1 October 2021 will it revert to the usual figure of £125,000.00.

Therefore, considerable savings can still be made.

For example, a purchaser who is paying £300,000.00 for their new house will have to pay SDLT of £2,500.00 if they complete their purchase between now and 30 September 2021. Had they completed prior to 30 June 2021 they would have paid no SDLT at all. However, there is still a considerable incentive to complete by 30 September because after that date they will have to pay £5,000.00.

It should be remembered first time buyers will still be able to take advantage of SDLT First Time Buyer Relief even after 30 September.

Conveyancers may now have an opportunity to catch their breath and reacquaint themselves with their families after many months of hard work and long hours! However, they should be prepared for another completion frenzy in September albeit not on the same scale as that we have just witnessed. Hopefully by then England will be European Champions, and the SDLT Holiday really will be all over…..

For advice about the SDLT Holiday, please contact me on 01926 954712 or another member of the Feldon Dunsmore team.

Author: Harvey Gibbs

2 July 2021