Homebuyers throughout the UK will now benefit from lower stamp duty costs, with Scottish and Welsh governments both confirming temporary tax cuts.
The Chancellor Rishi Sunak announced on 8th July that Stamp Duty Land Tax (SDLT) in England and Northern Ireland would be waived for all properties valued up to £500,000 until the end of March next year. First time buyers already paid no Stamp Duty on the first £300,000 and a reduced rate up to £500,000, but this has now been cut to zero. Landlords and those buying second homes will also benefit from the reduction, though they will still have to pay the 3% stamp duty surcharge which applies to additional properties.
Scotland and Wales set their own land taxes, so different rules apply in each of these countries. Here’s what the Scottish and Welsh governments have announced.
Land & Buildings Transaction Tax (LBTT) rules in Scotland
Scotland has increased the threshold at which homebuyers must pay LBTT to £250,000, up from £145,000 (£175,000 for first-time buyers). This change came into effect on 15th July and will stay in place until the end of March next year. Someone buying a £250,000 property in Scotland, for example, would save a maximum £2,100 in LBTT.
If you’re buying an additional property in Scotland
Purchases of additional properties in Scotland will also benefit from the reduction in LBTT but they will still be subject to a 4% surcharge.
Land Transaction Tax (LTT) in Wales
Homebuyers in Wales will also see the threshold at which LTT becomes payable rise to £250,000, with this change due to come into effect on 27th July. Currently, no stamp duty is payable on properties costing up to £180,000. The changes will result in a maximum saving of £2,450 for someone buying a property costing £250,000. The higher threshold will remain in place until 31st March 2021, which is when the stamp duty measures in England, Northern Ireland, and Scotland will also finish.
If you’re buying an additional property in Wales
Whereas in England, Northern Ireland and Scotland, homebuyers purchasing additional properties will benefit from the temporary higher stamp duty thresholds, those in Wales won’t.
LTT thresholds in Wales will remain unchanged for those buying additional properties, and buyers will also have to pay the extra 3% surcharge. For example, someone buying a second home in Wales costing £200,000 will continue to pay LTT at 3% on the first £180,000, and 6.5%, on the remaining £20,000 whereas someone purchasing a property which will be their only residence won’t have to pay any LTT, assuming the transaction completes on or after 27th July and before 31th March next year.
You can find out more about the changes and how it could affect you on our stamp duty calculator, which will continue to be updated to reflect these changes
Scotland and Wales follow England and NI stamp duty holiday