July 13 2020

Stamp Duty Changes for UK Property Investors Explained

July 13 2020

Stamp Duty Changes for UK Property Investors Explained

Author: Gareth MarshallCategory: International News, UK Property
  • Share

As the British Chancellor announces a stamp duty holiday until the end of March 2021, here’s a breakdown of how this will impact UK real estate investors.

It was the announcement that further underlined the key role UK property will play in the country’s post COVID-19 recovery.

On Wednesday 8th July 2020, Chancellor Rishi Sunak announced a stamp duty holiday for property buyers in England and Northern Ireland, effective immediately, until March 31st 2021.

More people buying homes is good news for the economy. And, as UK business and industry begins to re-emerge from lockdown, the government hopes that increased relief from stamp duty land tax (SDLT) will prompt a new wave of purchases and investments over the next seven and a half months.

Below we’ve broken down the new SDLT changes – and how this will impact people investing in property in the UK.

(Please note: Select Property Group is not a tax advisor. Please use this article as a guide only, and contact your financial advisor for further support).

What’s been announced?

Forming part of his Summer Statement, Chancellor of the Exchequer Rishi Sunak announced that he is raising the threshold for SDLT.

Until 31st March 2021, anyone buying a residential home in England and Northern Ireland as their primary residence will not pay SDLT on any property that’s valued below GBP 500,000.

“We need people to feel confident, confident to buy, sell, move and improve that will drive growth, that will create jobs. So, to catalyse the market and boost confidence I have decided today to cut stamp duty.”
Rishi Sunak – Chancellor of the Exchequer

SDLT is payable when a property is purchased in England and Northern Ireland. For property in Scotland, the tax is called Land and Buildings Transaction Tax, while in Wales buyers pay Land Transaction Tax.

These new changes announced by the Chancellor apply only to SDLT on residential property in England and Northern Ireland.

Do the changes also apply to property investors and overseas buyers?

Yes, they do. However, there is a slight variation.

If you are a UK resident that’s purchasing a second home, or a buy-to-let investment property, you are subject to a 3% SDLT surcharge. This also applies to any overseas-based purchaser buying a property in England or Northern Ireland for investment purposes.

This surcharge remains. However, the new threshold of GBP 500,000 does apply. So, until the end of March next year, property investors can buy any residential property below GBP 500,000 and will simply pay the 3% SDLT surcharge.

However, these changes only applies to residential property, not purpose-built student accommodation.

What do the changes look like?

To really illustrate how significant these changes are, here’s how the new SDLT rates compare with the previous rates:

SDLT rates in England and Northern Ireland prior to the new holiday announcement


New SDLT holiday rates – effective until March 31st 2021

(Please note: higher rates of SDLT may apply when a property is purchased through a corporate entity)

When do these new rates come into effect?

They are effective immediately and will last until 31st March 2021.

SDLT is payable when an individual takes possession of the property once the transaction has legally completed, or when the contract has been “substantially performed”, which is when at least 90% of the consideration has been paid.

So, if you complete your purchase before the end of March next year, or you have paid 90% of the cost before then, you may benefit from the SDLT holiday.

How much could I now save?

Prior to the new changes, if you were a real estate investor buying a property in England or Northern Ireland valued at GBP 499,000, you would need to pay GBP 29,920 in SDLT.

Now, however, the same property would only be subject to GBP 14,970 in SDLT. That’s a saving of just under GBP 15,000.

What happens after the 31st March 2021?

As things currently stand, from 1st April 2021 the previous SDLT rates will be reintroduced.

However, there’s another reason why overseas investors in particular should consider taking advantage of this opportunity now!

From April 1st 2021, there is scheduled to be an increased 2% surcharge for non-residents when buying residential property in England and Northern Ireland.

SDLT rates from April 1st 2021 for second home/investment property

You can read more about the new surcharge for non-UK residents from 1st April 2021 here.

Let’s help you to capitalise on this opportunity

Amidst the uncertainty created by COVID-19, investing in real estate offers you the opportunity to put your money into a tangible asset that works for those with a long-term view.

And with the new SDLT holiday, there’s never been a better time to own assets in the historically strong and resilient UK property market.

Completing in Q4 2020, Victoria Residence at Crown Street is one of the most in-demand new investment projects in Manchester.

Boasting a prime location within a new masterplanned community in Manchester city centre – one of the UK’s highest-performing investment cities – and premium facilities including high-floor swimming pool and Royal Garden, Victoria Residence at Crown Street is a breathtaking new development of luxury residential apartments.

Now 98% sold out, the final apartments have just been released. And, based on the starting price of GBP 299,000, you could now save GBP 4,950 in SDLT when buying before the end of March 2021.

Speak to a member of our team to see how we can help you to fully capitalise on the new SDLT holiday.

UK Property Investment guide

Current Investment Opportunities

Affinity Living

Pre-Launch Now On

More Details

The Blade
Prices from GBP 247,000

Now Launched

More Details

Victoria Residence at Crown Street
Prices from GBP 446,000

Complete & tenant-ready - Buy now and save on stamp duty

More Details

Vita Student
Park Place
Prices from GBP 148,000

New limited time payment plan on Phase 4 final properties

More Details

The UK Property Investment Newsletter

Receive the latest property investor news, insight and exclusive offers direct to your inbox and stay up to date with the latest research.

Learn more about what we do with your data at any time by reading our Privacy Policy.