STAMP DUTY HOLIDAY
Landlords across the country have gained a financial boost from cuts to tax on buying a home – unless the property is in Wales. How much they save depends on where they buy property as the tax rates and thresholds are different for England, Scotland, and Wales.
The Welsh Government announced the threshold for its land transaction tax will rise on 27 July from £180,000 to £250,000 until 31 March 2021. However, unlike in England and Northern Ireland, this tax reduction will not apply to purchases on additional properties including buy to let and second homes.
How the stamp duty discount works for landlords in each country
Stamp duty depends on the property location, not where the buyer lives. The saving depends on the property price and location.
England And Northern Ireland – Stamp Duty Land Tax (SDLT)
The lower rate threshold has increased from £125,000 to £500,000 for landlords and all other homebuyers.
The higher rate surcharge of 3% still applies to landlords and second homeowners.
The discount period runs from 8 July 2020 until 31 March 2021.
Property price Up to £500,000
Stamp duty rate 3%
£500,001 to £925,000
8%
£925,001 to £1.5 million
13%
Over £1.5 million
15%
Source: HMRC
Example: If a landlord buys a rental home for £375,000, the LTT is:
£375,000 @ 3% £11,250
Total stamp duty: £11,250
Wales – Land Transaction Tax (LTT)
The starting rate for paying the tax lifts from £180,000 to £250,000 from 27 July 2020 to 31 March 2021. However, landlords and secondhome buyers will still have to pay at the old rates:
Property price up to £180,000
LTT rate 3%
£180,001 to £250,000
6.5%
£250,001 to £400,000
8%
£400,001 to £750,000
10.5%
£750,001 to £1.5 million
13%
Over £1.5 million
15%
Source: Welsh Government
Example: If a landlord buys a rental home for £375,000, the LTT is:
£180,000 @ 3% £5,400
£70,000 @ 6.5% £4,550
£125,000 @ 8% £10,000
Total LTT: £19,950
Scotland – Land and Buildings Transaction Tax (LBTT)
Like England, the Scottish Government has pulled the lower rate threshold up to £250,000, but landlords and second homeowners must still pay the 4% additional rate.
The discount runs from 15 July 2020 to 31 March 2021.
Property price up to £250,000
Stamp duty rate 4%
£250,001 to £325,000
9%
£325,001 to £750,000
14%
Over £750,000
16%
Source: HMRC
Example: If a landlord buys a rental home for £375,000, the LBTT is:
£375,000 @ 4% £15,000
Total LBTT: £15,000
