As was expected, The Chancellor announced that the temporary increase in the SDLT 0% band to £500,000 would remain in place until 30 June 2021, having been scheduled to come to an end this month. The temporary increase has been very valuable to buyers, providing potential relief of up to £15,000 on the purchase of a residential property.
He acknowledged that bringing the current “holiday” to an end on 31 March 2021 would mean that a significant number of transactions would not be completed in time to benefit from the current measures, and could therefore collapse.
This is very welcome news, which has come in response to lobbying from various sectors of the property industry, as well as prospective buyers and sellers.
In addition, The Chancellor announced a phased return to previous SDLT rates and bands, with the 0% band being set at £250,000 for transactions completing between 1 July 2021 and 30 September 2021, giving a potential saving of £2,500. It will then return to its previous level of £125,000 from 1 October 2021.
The expectation is that this will further stimulate the property market, although it is perhaps reasonable to expect a further “bottle neck” as we approach 30 June 2021 and The Chancellor may again come under pressure to extend the current relaxation.
Whilst the measures announced will mean that many buyers of residential property in the coming months will pay no SDLT, regard still needs to be had to the higher rates of SDLT which can apply on the purchase of second and additional properties.
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