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Stamp Duty payments are required on property purchases in England and Northern Ireland. The rate of Stamp Duty Land Tax (SDLT) has temporarily undergone some changes due to the coronavirus pandemic. Read on to find out how Stamp Duty will change from April 2021.
SLDT returns must be sent to HMRC within 14 days of property completion, and tax must be paid in this period or penalties and interest could apply.
How much Stamp Duty Land Tax has to be paid is dependent on whether the land or property being purchased is residential, non-residential or mixed use.
Whether the purchase is by a first-time buyer also impacts on the amount of Stamp Duty that needs to be paid.
The total value you pay Stamp Duty on is usually the price you pay for the property or the land, but other factors may also be taken into account.
The Government website includes Stamp Duty calculators to give an idea of how much Stamp Duty may need to be paid on a property.
There are also equivalent taxes to Stamp Duty in Scotland and Wales.
The tax if the property or land is in Scotland is Land and Buildings Transaction Tax.
In Wales, Land Transaction Tax has to be paid if the sale was completed on or after April 1, 2018.
What is the current Stamp Duty threshold?
From July 8, 2020 for a limited time, people will only start to pay SDLT on the amount that they pay for a property above £500,000.
Following the introduction of the Stamp Duty holiday, the Treasury announced house sales rose by 21.3 percent in September 2020.
Chancellor Rishi Sunak said of the increase: “With a third of Brits planning to spend savings from the tax break on home improvements and renovations, the temporary Stamp Duty cut is boosting business and protecting jobs.
“This ranges from carpenters to cleaners, brickies and decorators, they can all benefit from each sale – helping us to further deliver on our Plan for Jobs.”
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When does the Stamp Duty holiday end?
The Stamp Duty holiday implemented during the coronavirus pandemic will come to an end on March 31, 2021.
From April 1, 2021, the SDLT threshold will return back to £125,000 for residential properties.
The SDLT threshold for non-residential land and properties will also be £150,000.
However from this date first-time buyers will be able to get a discount on Stamp Duty, as long as the purchase price of the property is £500,000 or less.
Groups within the property industry have called for the Stamp Duty holiday to be extended in light of the pandemic.
However housing minister Christopher Pincher said earlier this month the Government has no plans to extend the Stamp Duty holiday presently.
He said in the House of Commons: “The government does not plan to extend Stamp Duty relief, and will continue to monitor the property market.”
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