From July 2020, the property value threshold above which the Residential Rates of SDLT are paid on properties in England and Northern Ireland was temporarily raised to £500,000. This means many house buyers paid no tax at all. However, this temporary reduced rate of SDLT will come to an end on 31st March 2021.
The temporary changes end on 31st March, when the Residential Rates threshold will go down to £125,000, meaning tax will need to be paid on the value of the property above this amount.
What has been the impact of reduced rate of SDLT?. Increased demand during the tax relief period which has resulted in higher than otherwise expected property prices.
It is expected that this effect will end when the stamp duty holiday ends, causing market activity and house prices to drop. Landlords ought to be aware of the effect this could have on their plans to buy or sell.
NOTE: Those buying additional properties (e.g. second homes and buy-to-let properties) still have to pay the 3% additional rate, however. this temporary reduced rate of SDLT will come to an end on 31st March 2021.