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August 17th 2020

Property tax: temporary reductions in LBTT/ SDLT/ LTT

Among the many measures announced in response to the Covid-19 pandemic are welcome reductions in the amount of "stamp" taxes payable on residential property purchases.

Perhaps unsurprisingly, many estate agents are already reporting a significant increase in enquiries from property investors looking to take advantage of the temporary reductions.

In summary:


For transactions with an "effective date" from 15 July 2020 until 31 March 2021, the Land & Buildings Transaction Tax (LBTT) rate on residential property purchases above £145k has been reduced. Buyers will pay 0% (previously 2%) on the part of the price falling between £145k and £250k, saving up to £2,100. The "effective date" is the date of settlement or entry.

The 4% Additional Dwelling Supplement will still apply to second home purchases and purchases through companies.

England and Northern Ireland

For transactions between 8 July 2020 and 31 March 2021, the 0% band has increased from £125k to £500k. Buyers of residential property will pay 0% on the part of the price falling below £500k, saving up to £15,000 in Stamp Duty Land Tax (SDLT).

The 3% surcharge for second home owners and companies will continue to apply.


In Wales, the 0% band has increased from £180k to £250k on purchases between 27 July 2020 and 31 March 2021, saving buyers up to £2,450 in Land Transaction Tax (LTT).

Again the 3% surcharge will continue to apply to relevant transactions.

It's worth reflecting that, as late as 2011, the maximum rate of SDLT was 4%; now it can be as much as 16% in Scotland, 15% in England, Wales and Northern Ireland. Admittedly, the 4% was applied to the entire purchase price, whereas we now have a system of "bands" - but the tax increase on high value transactions has been enormous nonethless.

If you have any questions about this article, or if you require advice about the tax implications of a property transaction, contact us today.


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