Stamp Duty Land Tax (SDLT) is a lump-sum tax that you must pay if you buy property or land over a certain price in England.
In June 2020, the government announced a temporary stamp duty holiday. The holiday is designed to make buying homes more affordable for people who’ve suffered financially during the coronavirus crisis.
Our expert property law solicitors have answered some FAQs to help you understand the holiday and get the most out of it. You can also read our standard stamp duty FAQs.
If you’d like to buy a home during the holiday and save money on stamp duty, we can help – see our Conveyancing & Property section for more information.
When does the stamp duty holiday start? How long does it last?
The stamp duty holiday will apply to all property sales that complete between 8 July 2020 and 31 March 2021.
Back to top
How much stamp duty do I have to pay during the holiday?
The holiday will temporarily increase the stamp duty threshold from £125,000 to £500,000.
This means that if your property costs £500,000 or less, most buyers won’t have to pay any stamp duty at all.
If your property is worth more than £500,000, you’ll only pay stamp duty on the value over £500,000. The rate of stamp duty that you’ll pay goes up depending on the value of the property:
| Property value |
Holiday SDLT rate |
| Up to £500,000 |
0% |
| The next £425,000 (£500,001 to £925,000) |
5% |
| The next £525,000 (£925,001 to £1.5 million) |
10% |
| Any remaining amount over £1.5 million |
12% |
The new threshold applies to landlords and second home buyers as well, but they still have to pay the 3% stamp duty premium.
Back to top
How much can I save?
You can save up to £15,000 if your property is worth £500,000 or more:
|
Property value
|
Old stamp duty cost
|
Holiday stamp duty cost
|
Saving
|
|
£200,000
|
£1,500
|
0
|
£1,500
|
|
£300,000
|
£5,000
|
0
|
£5,000
|
|
£400,000
|
£10,000
|
0
|
£10,000
|
|
£500,000
|
£15,000
|
0
|
£15,000
|
|
£600,000
|
£20,000
|
£5000
|
£15,000
|
|
£700,000
|
£25,000
|
£10,000
|
£15,000
|
|
£800,000
|
£30,000
|
£15,000
|
£15,000
|
|
£900,000
|
£35,000
|
£20,000
|
£15,000
|
|
£1,000,000
|
£43,750
|
£28,750
|
£15,000
|
Back to top
I’ve already started buying a house, can I still benefit from the stamp duty holiday?
You only have to pay stamp duty once your purchase completes. That means that if you’ve started the process of buying a house but haven’t reached completion yet, you can still benefit from the holiday. You’ll pay the reduced stamp duty rate as long as the transaction completes before 31st March 2021.
Back to top
How does the stamp duty holiday affect first-time buyers?
Normally, first-time buyers benefit from a stamp duty discount, only paying stamp duty for properties over £300,000.
The stamp duty holiday replaces this discount and first-time buyers benefit from the same £500,000 threshold as everyone else.
Back to top
Standard Stamp Duty FAQs
Who has to pay Stamp Duty Land Tax?
All property buyers must declare the circumstances of any land transaction to Her Majesty's Revenue & Customs (HMRC). SDLT is payable when you:
- buy a freehold property
- buy a new or existing leasehold
- buy a property through a shared ownership scheme
- are transferred land or property in exchange for payment, e.g. you take on a mortgage or buy a share in a house.
You don’t have to pay SDLT under certain circumstances, such as:
- Where no money or other payment changes hands for a land or property transfer
- Where the property is inherited under a Will
- Property is transferred because of divorce or dissolution of a civil partnership
- Where a freehold property is purchased for less than £40,000
- Where you are a first time buyer purchasing a property with a value of £300,000 or less
- Upon the purchase or assignment of a lease of 7 years or more, so long as the premium is less than £40,000 and the annual rent is less than £1,000
- Upon the purchase or assignment of a lease of less than 7 years, as long as the amount paid is less than the residential or non-residential SDLT threshold.
Back to top
How much Stamp Duty Land Tax do I have to pay?
This information does not apply during the stamp duty holiday between 8 July 2020 and 31 March 2021. See how much stamp duty you have to pay during the holiday
The amount of SDLT you must pay depends on the value of the property. SDLT is payable in increasing portions of the property price above £125,000:
| Property/Lease Premium Or Transfer Value |
SDLT Rate |
| Up to £125,000 |
Zero |
| The next £125,000 (the portion from £125,001 to £250,000) |
2% |
| The next £675,000 (the portion from £250,001 to £925,000) |
5% |
| The next £575,000 (the portion from £925,001 to £1.5 million) |
10% |
| The remaining amount (the portion above £1.5 million) |
12% |
For example, a property bought for £180,000 will be taxed at 0% for the first £125,000 and 2% for the next £55,000 so you will pay £1,100 in SDLT. If you are a first time buyer in England or Wales, you would not need to pay SDLT on this property.
Someone buying a £400,000 property would be charged 0% for the first £125,000, 2% for the next £125,000 and 5% for the remaining £150,000 which gives a total of £10,000 of SDLT to pay. If you are a first time buyer in England or Wales, you would be charged 0% for the first £300,000, and 5% for the next £100,000, for a total of £5,000 SDLT to pay.
You may also be liable to pay 3% on top of the normal SDLT rates if buying a new residential property as a second home or investment property. This additional 3% rate may apply even if the property you already own is outside England, Wales and Northern Ireland.
HMRC looks closely at transactions where the purchase price has been divided between land, and fixtures & fittings. HMRC are able to charge additional tax if they find that your declaration does not match the true value of these items,
Back to top
When do I pay Stamp Duty Land Tax?
In most cases, an SDLT return is sent to HMRC and the tax is paid within 14 days of completion of the purchase. There are certain exceptions to this where you don’t need to send an SDLT return.
Back to top
Do first time buyers have to pay Stamp Duty Land Tax?
If you’re buying your first home for £300,000 or less, you don’t have to pay any stamp duty. If the property is worth between £300,000 and £500,000, you’ll only pay stamp duty on the amount between £300,001 and £500,000, at a rate of 5%.
Back to top
If you would like help with paying SDLT or any other part of the conveyancing process, our specialist conveyancing solicitors can help. Call our team today on 0370 1500 100 to find out more.
![]()
All Scottish cases will be handled by the Scottish law firm with which we are associated, Irwin Mitchell Scotland LLP. The law relating to conveyancing and property is different in Scotland and you will receive separate advice about what that means. Please visit our Scottish Conveyancing page for more information.
