The move in the summer statement creates an SDLT “holiday” on the first £500,000 of all residential property sales in England and Northern Ireland until 31 March 2021.
The increase in the zero tax band from £125,000 to half a million will immediately benefit buyers of higher-value homes and is expected to cut £4,500 from the average SDLT bill.
The injection of extra cash into the property market hit by coronavirus could create a knock-on boost for registered providers (RPs), property partner Sandy Munroe believes.
“This should be good news for RPs because it will make their open market sales slightly more affordable,” she said.
“Obviously it’s designed to put money in the pockets of those buying higher value homes, which perhaps the government sees as its core supporters.
“But property values are so high generally that the majority of social housing open market plots are sold at more than the SDLT threshold of £125,000.
“Removing the tax take on this slice of the market should create an increase in demand at a time when RPs’ open market sales look vulnerable to the downturn caused by the COVID crisis.”
The SDLT cut was announced in the chancellor’s summer mini-budget and applies to all residential property sales completing on or after July 8 2020, until March 31 2021.
The effect of the measures is to widen the SDLT nil rate band to cover the first £500,000 of all residential purchases in England and Northern Ireland, and similar measures have also been put in place in Wales and Scotland by their devolved governments.
The maximum buyers can save on a purchase is £15,000, if they are buying a property of £500,000 or more.
The SDLT changes come as the market for residential property shows signs of decline during the coronavirus pandemic.
It is also intended to boost a property market hit by lockdown. According to the Halifax, house prices have fallen for four months in a row in 2020 and the Nationwide Building Society reported the first annual fall in UK house prices since 2012.
However, following the SDLT reduction, the website Rightmove reported an increase in asking prices of 2.4% to an average national asking price of £320,265.
Mr Sunak claimed the average SDLT bill will fall by £4,500 because of the measures and that nearly nine out of 10 people buying a main home in 2020 will pay no SDLT at all.
Before the announcement, stamp duty in England and Northern Ireland was paid on land or property sold for £125,000 or more, while first-time buyers did not pay any stamp duty up to £300,000. This stamp duty holiday replaces the first-time buyer discount.
Landlords and second home buyers in England and Northern Ireland are also eligible for the tax cut but will still have to pay the extra 3% of stamp duty they were charged under the previous rules.
The government's annual take from stamp duty is around £12bn, according to the latest figures released by HM Revenue and Customs, equivalent to 2% of the Treasury's total tax take.
Please contact Sandy Munroe.
Luton Borough Council was prosecuted by the HSE late last year following an incident at a high school in which an assistant headteacher was attacked by a pupil and left with life-changing injuries.
This ebriefing looks at the proposal to set out 'public procurement principles' in the proposed procurement legislation.
Happy New Year - our first newsletter of 2021! Throughout this year we will continue to bring you news and developments relating to the charities sector.
Local authorities should be wary of reserving contracts for local suppliers, as recommended by Procurement Policy Note (PPN) 11/20. Other contracting authorities may want to maximise their use of this
Most housing practitioners have perhaps been waiting for this news since the latest lockdown was announced by the Prime Minister on 4 January 2021.
Climate change and biodiversity is an area where significantly faster changes are needed on a global and local basis.
Chris Lloyd Smith, Adrian Leonard and Lisa Whitehouse discuss the planning opportunities available to owners of businesses and how to prepare for unforeseen events.
In their 3rd podcast of the series, Chris Lloyd-Smith and Maria Ramon discuss a number of problems with and difficulties that can arise in mediation and the mechanisms they use to overcome them.
Our previous round-up began by sharing the news that two vaccines had shown very promising test results. Here we are, not even a month later, and the first vaccines have already been administered!
The Covid-19 crisis has demonstrated that there is great resilience and innovation in the housing sector across Greater Manchester, it has also brought shortfalls and other priorities sharply into foc
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.