Two changes to Stamp Duty Land Tax (SDLT) were announced in the 2010 budget. These are:
• A two year holiday period from SDLT for first time property buyers; and
• A new rate of SDLT for expensive properties
The following must apply for first time buyers to qualify:
an individual or individuals jointly purchase a major interest in land which is wholly residential, and
the consideration is more than £125,000 but not more than £250,000, and
that individual (or all of them) intends to occupy the property as his/her or their only or main residence and
has or have not previously purchased such an interest or its equivalent anywhere in the world and
the effective date of the transaction is on or after 25 March 2010 and before 25 March 2012.
At present the highest SDLT rate of 4% applies to purchases where the consideration exceeds £500,000.
A new SDLT rate of 5% will be intoduced for residential property transactions where the consideration exceeds £1 million. This new higher rate will not be introduced until April 2011 and will only apply to residential purchases where the effective date (normally the date of completion) is on or after 6 April 2011.